Biohit H2'25: Strong earnings – more moderate growth outlook

Translation: Original published in Finnish on 02/12/2026 at 07:00 am EET

Biohit’s revenue was line with our estimate and earnings exceeded it. However, growth was mainly driven by China's licensing income, which, according to the company, will cease in the future. The company was also more cautious than before with its guidance for the current year. We are moderately downgrading our estimates and adjusting our target price to EUR 3.5 (was 3.7). The risk/reward ratio remains positive, so we reiterate our Accumulate recommendation.

Growth accelerated at the end of the year, supported by the China agreement

Biohit’s H2 revenue was 8.3 MEUR (+20% vs. H2’24). Full-year growth was +10%. The growth was in line with our estimate and at the lower end of the company's target range (10-20%). The Middle East market, which significantly weighed on the company in H1, had reopened, although deliveries remained at a moderate level in H2, according to the company. A significant portion of H2's growth was explained by the renewed Chinese agreement during the fall, which brought in 2.8 MEUR in licensing income (H2'24 no licensing income). However, according to the company, licensing income will cease in the future, so the tailwind is likely to wear off. For other markets, revenue was mainly at the level of the comparison period.

The guidance for revenue growth for this year was 5-10%, which is quite clearly below the company's strategic target (15-20%) and more cautious than before. The moderate guidance was due to slower-than-expected progress in GastroPanelvalidations and implementations, and the future discontinuation of licensing income from China. The company did not specify whether any licensing income would be received in 2026.

Earnings were strong, but the outlook was more subdued

Biohit's EBIT for H2 was 1.7 MEUR, which grew strongly from the comparison period and exceeded our forecast (1.3 MEUR). The EBIT margin for H2 was excellent at 21% and 19% for the full year. Earnings were boosted by Chinese licensing income, which the company has not previously received in H2. Going forward, profitability is unlikely to remain at the same level due to ceasing licensing income and changes in the sales mix.

Operating cash flow remained 0.7 MEUR negative for the full year (H2: +0.2 MEUR). The deviation relative to earnings is further explained by rapidly growing receivables from China, which tied up 4.3 MEUR during the year (contract-based assets on the balance sheet). We assess the actual risks related to receivables, which are, however, compensated by a pledge of 1.5 million Biohit shares. According to management, these items are likely to continue to grow in 2026, but they should unwind in the longer term. According to the company, the weak cash flow was partly related to the timing of invoicing and customer payments related to OEM deliveries.

Moderate decrease in estimates

Despite the strong earnings, the guidance was well below our expectations. The US FDA process is also progressing slightly slower than previous estimates, which shifts our expectations forward in time. Our estimates for the coming years are thus decreasing, but the long-term outlook remains largely unchanged.

Valuation remains on the attractive side

The share's P/E multiple based on 2026 estimates is 21x. The 2026 EV/EBIT multiple of 15x, which takes into account the strong balance sheet, is attractive in our view, even though the uncertainty of the forecasts is high. The multiples are slightly below those of global large-cap peers (2026 EV/EBIT 16x). The gap has narrowed due to the declined valuation of peers. In our view, the stock is also reasonably priced in terms of EV/S (2026 EV/S: 2.3x) and cash flow, and the valuation includes a safety margin. Thus, we believe that the reward/risk ratio is still attractive.