Company Overview - Hai Ji Ya Medical Holdings Limited is a medical group focused on oncology, listed on the Hong Kong Stock Exchange since June 29, 2020, under stock code 06078.HK [3] - The company operates a network of oncology-focused hospitals and radiotherapy centers across multiple provinces and cities in China, managing or operating 13 hospitals as of June 30, 2023 [3] - The company has established partnerships with 24 third-party hospitals to provide radiotherapy services [3] Financial Performance - For the fiscal year ending December 31, 2024, Hai Ji Ya Medical reported total revenue of 4.446 billion yuan, a year-on-year increase of 9.06% [2] - The net profit attributable to shareholders was 598 million yuan, reflecting a year-on-year decrease of 12.4% [2] - The company's gross margin stood at 29.9%, with a debt-to-asset ratio of 38.93% [2] Stock Performance - As of April 1, the stock price of Hai Ji Ya Medical was 14.78 HKD per share, marking a 9.97% increase with a trading volume of 34.7844 million shares and a turnover of 0.525 billion HKD [1] - Over the past month, the stock has experienced a cumulative decline of 8.94%, and a year-to-date decline of 5.75%, underperforming the Hang Seng Index, which has risen by 15.25% [2] Industry Valuation - The average price-to-earnings (P/E) ratio for the healthcare equipment and services industry is -18.15 times, with a median of 2.44 times [3] - Hai Ji Ya Medical's P/E ratio is 12.94 times, ranking 25th in the industry [3] - Comparatively, other companies in the sector have significantly lower P/E ratios, such as Giant Medical Holdings at 0.24 times and Jing Jiu Kang Liao at 0.38 times [3] Technological Development - Shanghai Gamma Star Technology Development Co., Ltd., a wholly-owned subsidiary of Hai Ji Ya Medical, has developed a patented stereotactic radiotherapy system for treating tumors [4] - The company employs a vertically integrated radiotherapy service model, enhancing operational efficiency and profitability [4] Shareholder Activity - On March 31, 2025, shareholder Zhu Yiwen increased his holdings by 258,400 shares at an average price of 13.3997 HKD per share, bringing his total holdings to 284.2 million shares, representing 45.7% of the company [5]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5][12] Core Insights - The company experienced revenue growth of 9.1% year-on-year in 2024, achieving a total revenue of 4.446 billion yuan, while net profit decreased by 12.6% to 598 million yuan due to financial asset impairment [5][6] - The outpatient services saw significant growth, with outpatient revenue increasing by 20.8% to 1.633 billion yuan, contributing to a total hospital revenue of 4.32 billion yuan [6] - The company has adjusted its profit forecasts for 2025-2026, now expecting net profits of 697 million yuan and 779 million yuan respectively, with a new forecast for 2027 at 862 million yuan [5] Financial Performance Summary - In 2024, the company reported a gross margin of 29.9% and a net margin of 13.5% [5] - The number of outpatient visits increased by 23.8% to 4.526 million, and surgical cases rose by 15.8% to 97,000, with surgical revenue growing by 21.2% [6] - The company plans to expand its hospital capacity significantly, with new hospitals and expansions projected to increase bed capacity to over 16,000 [7] Valuation Metrics - The current price-to-earnings (P/E) ratio is projected at 12.3 for 2025, 11.0 for 2026, and 10.0 for 2027 [5] - The company’s return on equity (ROE) is expected to be 9.49% in 2025, increasing slightly in subsequent years [8] - The projected earnings per share (EPS) for 2025 is 1.12 yuan, with a gradual increase to 1.39 yuan by 2027 [8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5][12] Core Insights - In 2024, the company experienced revenue fluctuations with a total revenue of 4.446 billion HKD (up 9.1% year-on-year) and a net profit of 598 million HKD (down 12.6% year-on-year) [5] - The adjusted net profit for 2024 was 602 million HKD (down 15.6% year-on-year), with a gross margin of 29.9% (down 1.6 percentage points) and a net margin of 13.5% [5] - Due to the impact of financial asset impairment, the profit forecast for 2025-2026 has been revised downwards, with expected net profits of 697 million HKD and 779 million HKD for 2025 and 2026 respectively [5] - The company is projected to achieve net profits of 862 million HKD in 2027, with corresponding price-to-earnings ratios of 12.3, 11.0, and 10.0 for 2025-2027 [5] Revenue and Business Growth - The company's outpatient services saw rapid growth in 2024, with outpatient service revenue reaching 1.633 billion HKD (up 20.8% year-on-year) [6] - The total revenue from hospital operations was 4.32 billion HKD (up 11.1% year-on-year), with inpatient service revenue of 2.69 billion HKD (up 5.9% year-on-year) [6] - The oncology-related business generated 1.963 billion HKD in revenue (up 10.4% year-on-year), accounting for 44.15% of total revenue [6] - The number of patient visits increased to 4.526 million (up 23.8% year-on-year), and the number of surgeries performed was 97,000 (up 15.8% year-on-year) [6] Hospital Development and Expansion - The company is progressing with new hospital projects, including the completion of Dezhou Haijia Hospital, which has 1,000 planned beds [7] - The Wuxi Haijia Hospital project is expected to be completed and opened in 2025, with 800 to 1,000 planned beds [7] - Ongoing expansions include the Kaiyuan Hospital phase II project, which will add approximately 500 beds, and several other hospital expansion projects that will increase total bed capacity to over 16,000 [7]

Core Viewpoint - The Hang Seng Healthcare Index (HSHCI) has shown strong performance, with significant increases in constituent stocks and the Hang Seng Healthcare ETF, indicating positive market sentiment in the healthcare sector [1][4]. Group 1: Market Performance - As of April 1, 2025, the HSHCI rose by 2.09%, with notable gains in stocks such as Genscript Biotech (8.36%) and Haijia Medical (7.74%) [1]. - The Hang Seng Healthcare ETF (513060) opened high and increased by 2.53%, with a latest price of 0.49 HKD and a trading volume of 1.28 billion HKD, achieving a turnover rate of 0.97% [1]. Group 2: ETF Growth and Performance Metrics - The Hang Seng Healthcare ETF has seen a significant growth of 2.648 billion HKD in size over the past year, ranking in the top third among comparable funds [4]. - The ETF's financing buy-in amount reached 322 million HKD, with a financing balance of 545 million HKD [4]. - Since its inception, the ETF recorded a highest monthly return of 28.34% and an average monthly return of 7.01% [4]. - The ETF's Sharpe ratio for the past year is 1.40, indicating strong risk-adjusted returns [4]. Group 3: Valuation and Industry Outlook - The latest price-to-earnings ratio (PE-TTM) for the HSHCI is 25.11, placing it in the 2.17% percentile over the past year, suggesting it is undervalued compared to historical levels [5]. - The National Medical Products Administration reported that 48 innovative drugs were approved in 2024, covering various therapeutic areas, indicating a robust pipeline for the pharmaceutical industry [5]. - Recent policies are shifting from cost control to encouraging innovation, with a focus on leading companies with strong international capabilities [5]. Group 4: Index Composition - As of March 31, 2025, the top ten weighted stocks in the HSHCI include WuXi Biologics, BeiGene, and Innovent Biologics, collectively accounting for 56.21% of the index [6].

Investment Rating - The report maintains a "Buy" rating for the company, Hai Jiaya Medical (6078 HK), with a target price of HKD 18.00, indicating a potential upside of 30.2% from the current closing price of HKD 13.82 [2][3]. Core Insights - The company's performance in 2024 is expected to be under pressure due to changes in the medical insurance payment environment, but long-term growth visibility remains significant. It is anticipated that by 2025, the company will recover with a profit growth rate exceeding 20% as the impact of medical insurance cost control normalizes and new hospital integrations are completed [3][7]. - The report highlights that while the company's revenue for 2024 is projected to grow by 9%, it falls short of expectations, with a notable decline of 11% in the second half of 2024. The oncology segment remains stable, contributing 44% to revenue, while outpatient services show resilience with a 21% increase in annual revenue [7][8]. - The report emphasizes the company's ongoing expansion through new hospitals and acquisitions, which are expected to contribute positively to revenue growth in the future. The company is also exploring new business avenues in response to the changing medical insurance landscape, including internet hospitals and self-paid services related to innovative drugs [7][8]. Financial Forecast Changes - Revenue and net profit forecasts for 2025 and 2026 have been adjusted downward by 16-21% and 21-27%, respectively, reflecting the short-term impact of medical insurance cost control on the company's performance [6][7]. - The updated financial projections for 2025 estimate revenue at RMB 4,987 million, a decrease of 15.8% from previous estimates, with a net profit forecast of RMB 743 million, down 20.6% [6][13].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Insights - The company reported a revenue of 4.446 billion yuan, representing a year-on-year increase of 9.1%, while net profit decreased by 12.6% to 598 million yuan [1] - The hospital business showed steady growth, with revenue reaching 4.323 billion yuan in 2024, up 11.1% year-on-year, driven by outpatient and inpatient services [2] - The company is focusing on enhancing its oncology specialty capabilities and innovating its business development model, including collaborations with commercial insurance companies and the integration of AI technology [3] Summary by Sections Financial Performance - Revenue for 2024 is projected at 4.825 billion yuan, with a growth rate of 8.5% [4] - Net profit for 2024 is forecasted at 688 million yuan, reflecting a 15% increase from the previous year [4] - Earnings per share (EPS) for 2024 is estimated at 1.11 yuan, with corresponding price-to-earnings (P/E) ratios of 12, 10, and 9 for 2024, 2025, and 2026 respectively [3][4] Business Development - The company operates 16 hospitals, including 4 tertiary hospitals and 12 secondary hospitals, with ongoing construction of 2 additional tertiary hospitals [2] - The company is actively expanding its service offerings beyond basic medical services, including partnerships for infertility treatment and enhancements in aesthetic and dental services [3] Market Position - The company has a total market capitalization of 85.93 billion HKD, with a current share price of 13.82 HKD [5] - The stock has experienced a significant decline over the past year, with a relative performance of -98.3% [6]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 18.00, indicating a potential upside of 30.2% from the current price of HKD 13.82 [2][3]. Core Insights - The company's performance in 2024 is expected to be under pressure due to changes in the medical insurance payment environment, but long-term growth visibility remains significant. It is anticipated that by 2025, the company will recover with a profit growth rate exceeding 20% as the impact of cost control normalizes and new hospital integrations are completed [3][7]. - The report highlights that despite a projected revenue growth of 9% for 2024, the second half of the year may see an 11% decline in revenue due to pressures from DRG/DIP nationwide promotion and slow reimbursement in certain regions. However, the company has shown resilience in outpatient services, with a 21% increase in annual revenue [7][8]. Financial Forecast Changes - Revenue and net profit forecasts for 2025 and 2026 have been adjusted downwards by 16-21% and 21-27% respectively. The new revenue forecast for 2025 is set at RMB 4,987 million, down from RMB 5,922 million, while the net profit forecast is reduced to RMB 743 million from RMB 936 million [6][7]. - The report provides detailed financial projections, including a projected revenue of RMB 5,527 million for 2026 and RMB 6,291 million for 2027, with corresponding net profits of RMB 853 million and RMB 1,033 million [13]. Business Growth Drivers - New hospital openings and expansions are expected to provide growth momentum. The company has completed the acceptance and opening of a tertiary hospital in Dezhou, with additional hospitals in Wuxi and Changshu expected to open by the end of this year and next year respectively [7][8]. - The company is exploring new business avenues in response to the changing medical insurance payment environment, including internet hospitals and self-funded services related to innovative drugs, which are anticipated to have long-term growth potential [7][8].

Group 1 - The company reported a revenue of RMB 4.446 billion for the year ending December 31, 2024, representing a year-on-year increase of 9.1% [1] - Net profit decreased to RMB 598 million, down 12.6% year-on-year [1] - Gross profit increased to RMB 1.329 billion, reflecting a year-on-year growth of 3.4% [1] Group 2 - The company operates 16 hospitals focused on oncology, including 4 tertiary hospitals and 12 secondary hospitals, with 2 additional tertiary hospitals under construction [1] - The company has enhanced its clinical capabilities, adding 1 national chest pain center and 6 provincial and municipal key specialties during the reporting period [1] - The company has a total of 86 high-level medical talents, including experts receiving special government allowances and leaders of various specialty societies, along with 1,236 senior medical professionals [1] Group 3 - The company achieved a patient satisfaction rate of 97.03% for the 2024 fiscal year, an increase of 0.91 percentage points from the previous year [2] - The company is innovating its medical service models and exploring strategic partnerships with commercial insurance companies to improve the medical payment system [2] - The company is integrating artificial intelligence (AI) technology in areas such as radiation therapy, imaging-assisted diagnosis, mobile nursing, and smart patient services to enhance efficiency and patient experience [2]

Financial Performance - The company's revenue increased by 9.1% to RMB 4,446.1 million for the year ending December 31, 2024, compared to RMB 4,076.7 million for the previous year[2]. - Gross profit rose by 3.4% to RMB 1,329.5 million, up from RMB 1,286.3 million in the prior year[2]. - EBITDA grew by 2.0% to RMB 1,105.8 million, compared to RMB 1,084.1 million for the year ending December 31, 2023[2]. - Net profit decreased by 12.6% to RMB 598.3 million, down from RMB 684.9 million in the previous year[2]. - The group's hospital business revenue reached RMB 4,322.6 million, an increase of 11.1% compared to the previous year[12]. - Outpatient service revenue increased by 20.8% to RMB 1,633.0 million, while inpatient service revenue accounted for 60.5% of total hospital business revenue[11]. - The revenue from oncology-related services rose by 10.4% to RMB 1,963.0 million, representing 44.2% of total revenue[13]. - The group's gross profit from hospital operations was RMB 1,278.4 million, maintaining a stable gross margin of 29.6%[14]. - The group completed 96,993 surgeries, a year-on-year increase of 15.8%, with surgical revenue increasing by 21.2%[12]. - The profit before tax for 2024 was RMB 750,816,000, down from RMB 856,087,000 in 2023, indicating a decrease of about 12.3%[152]. Cash Flow and Financial Position - The net cash ratio, excluding pre-tax fees and payables related to acquired hospitals, improved to 137.2%, an increase of 22.9 percentage points from 114.3% in the same period last year[3]. - As of December 31, 2024, the group's cash and cash equivalents totaled RMB 369.1 million, with structured deposits and financial products amounting to RMB 282.5 million, totaling RMB 651.6 million[66]. - The net cash inflow from operating activities decreased by 9.7% from RMB 782.8 million for the year ended December 31, 2023, to RMB 707.1 million for the year ended December 31, 2024[67]. - The net cash used in investing activities decreased by 76.6% from RMB 2,863.5 million to RMB 671.1 million, primarily due to a reduction in payments for acquiring subsidiaries by RMB 1,755.8 million[68]. - Total assets increased by 1.8% from RMB 10,734.6 million to RMB 10,929.3 million[73]. - Total liabilities decreased by 5.0% from RMB 4,479.7 million to RMB 4,254.9 million[73]. - The company's debt-to-equity ratio stands at 36.3% as of December 31, 2024[86]. - The company's interest-bearing debt ratio is 25.4%, unchanged from 2023[85]. Operational Highlights - Patient satisfaction reached 97.03%, an increase of 0.91 percentage points from the previous year[8]. - The number of patient visits increased by 23.8% to approximately 4.5 million for the year ending December 31, 2024[9]. - The total number of medical professionals increased by 124 to 7,607, with 791 professionals promoted to higher titles, enhancing the hospital's long-term development[20]. - The online hospital registered nearly 230,000 consultations during the reporting period, showcasing the effectiveness of its internet medical services[27]. - The group has established a clinical medical research institute in collaboration with Suzhou University, furthering its research capabilities[24]. Strategic Initiatives - The company is actively exploring strategic partnerships with commercial insurance companies to enhance its medical payment system[8]. - The group is focused on strengthening oncology and related disciplines, enhancing the overall service level and competitiveness of its hospitals[15]. - The group has signed contracts with nearly 20 insurance companies, becoming a designated hospital for insurance claims and gradually launching direct compensation services[26]. - The company plans to enhance its clinical capabilities and service levels to meet the growing demand for tumor treatment, focusing on long-term brand building and operational efficiency[47]. Employee and Governance - The total employee compensation, including directors' salaries, amounted to RMB 1,456.1 million for the year ending December 31, 2024, compared to RMB 1,335.9 million for the previous year[96]. - The company has 8,169 full-time employees as of December 31, 2024, a decrease from 8,238 in the previous year[95]. - The board of directors includes a mix of executive and independent non-executive members, promoting good corporate governance[184]. - The company emphasizes transparency and integrity in its operations, with strict anti-corruption measures in place[38]. Environmental and Social Responsibility - The company has set targets for greenhouse gas emission intensity, water resource usage intensity, and energy usage intensity to improve its environmental performance by 2030[37]. - The company is committed to environmental protection as a strategic priority, utilizing standardized management to oversee resource use in its hospitals[37]. - The group actively engages in community service and medical charity activities, enhancing its brand influence and social impact[34]. Market Outlook - The tumor medical service market in China is projected to grow from RMB 495.1 billion in 2022 to RMB 768.7 billion by 2026, with a compound annual growth rate (CAGR) of 11.6%[45]. - The aging population in China is expected to reach 310 million by the end of 2024, with those aged 65 and above accounting for 15.6% of the total population, driving demand for cancer-related treatments[44].

Investment Rating - The report assigns an "Accumulate" rating to the company with a target price adjusted to HKD 19.86, reflecting a potential upside of 10.9% based on a 13.0x 2025E PER [3][4]. Core Insights - The company's operations are expected to be impacted in the short term due to factors such as strict medical insurance cost control and weak consumer spending power among end patients, leading to a downward revision of revenue and net profit forecasts for 2024 by 6.5% and 7.5% respectively [1][2]. - The implementation of immediate medical insurance settlement is anticipated to alleviate financial pressure on medical institutions in the long run, but the actual benefits may take time to materialize due to varying local insurance fund conditions [2]. - The revenue forecasts for 2025-2026 have been revised downwards by 5.3% and 5.7%, with net profit forecasts adjusted down by 7.4% and 8.3% respectively, while the projected CAGR for net profit from 2023 to 2026 is estimated at 13.3% [2]. Financial Summary - Total revenue is projected to grow from RMB 3,196 million in 2022 to RMB 6,386 million by 2026, with a CAGR of 18.6% for 2024 and 20.3% for 2025 [3][7]. - Shareholder net profit is expected to increase from RMB 477 million in 2022 to RMB 994 million in 2026, with growth rates of 11.6% for 2024 and 17.9% for 2025 [3][7]. - The company’s earnings per share (EPS) is forecasted to rise from RMB 0.77 in 2022 to RMB 1.57 in 2026, with a corresponding decrease in the price-to-earnings (P/E) ratio from 21.6 in 2022 to 10.6 in 2026 [3][7].