Kingmed Diagnostics(SH:603882) GF SECURITIES·2024-07-11 01:01Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 37.53 CNY per share, compared to the current price of 25.01 CNY [4][10]. Core Insights - The company is expected to report a significant decline in net profit for the first half of 2024, with estimates ranging from 80 million to 100 million CNY, representing a year-on-year decrease of 64.89% to 71.91% [2][3]. - The decline in profit is attributed to slower growth in routine testing demand and high fixed costs, leading to lower-than-expected economies of scale. The company's revenue for Q1 2023 was 1.841 billion CNY, down 13.05% year-on-year [2][3]. - The company anticipates a credit impairment loss of approximately 290 million CNY for the first half of 2024, primarily due to long collection cycles for accounts receivable [2][3]. - There is an expected improvement in profitability on a quarter-on-quarter basis, with a projected net profit of 98.64 million to 118.64 million CNY for Q2 2024, indicating a turnaround from a net loss of 18.64 million CNY in Q1 2024 [2][3]. - The company is expected to recover gradually as external conditions improve, supported by its strong market position and long-term profit potential. Forecasted net profits for 2024 to 2026 are 586 million, 822 million, and 1.044 billion CNY, respectively [2][3]. Financial Summary - Revenue for 2022 was 15.476 billion CNY, with a projected decline to 8.550 billion CNY in 2024, reflecting a growth rate of -44.8% [3][9]. - The company's EBITDA is expected to increase from 1.172 billion CNY in 2023 to 1.963 billion CNY by 2026 [3][9]. - The net profit margin is projected to decrease from 18.4% in 2022 to 6.7% in 2024, with a gradual recovery expected thereafter [9]. - The company's P/E ratio is forecasted to decrease from 45.59 in 2023 to 19.99 in 2024, indicating a potential valuation improvement [3][9].