Sinocare(300298) 国盛证券·2024-07-16 00:31Investment Rating - The report gives a "Buy" rating for the company, with expected revenue growth of 19.0%, 17.2%, and 13.9% for 2024-2026, and net profit growth of 56.6%, 24.2%, and 21.9% respectively [1][11] Core Views - The company is a leading domestic blood glucose monitoring (BGM) manufacturer with a strong market position, holding over 50% of the retail market share in China [1][128] - The company's continuous glucose monitoring (CGM) product, launched in 2023, is expected to drive a second growth curve, with significant potential in both domestic and international markets [1][17] - The global diabetes market is expanding, with 528 million diabetic patients worldwide in 2022, providing a solid demand base for blood glucose monitoring products [1][137] Market and Industry Analysis - The global diabetes monitoring market grew from 13 billion in 2020, with a CAGR of 22.7% [1][39] - China's blood glucose monitoring penetration rate is only 25%, significantly lower than the global average of 60% and 90% in developed countries, indicating substantial growth potential [1][137] - The company's CGM product, priced at a daily cost of 17.27 RMB, offers a competitive advantage in terms of cost-effectiveness compared to other brands [1][74] Product and Technology - The company's CGM product uses third-generation technology, offering advantages in accuracy, stability, and longevity [1][87] - The company has a comprehensive product portfolio, including BGM and CGM products, covering over 70 indicators such as blood glucose, lipids, and uric acid [63][22] - The company's CGM product received EU MDR certification in September 2023 and is expected to enter the US market by mid-2025 [83][91] Financial Performance - The company's revenue is projected to reach 4.83 billion RMB, 5.66 billion RMB, and 6.45 billion RMB in 2024-2026, with net profits of 445 million RMB, 553 million RMB, and 675 million RMB respectively [11][118] - The company's gross margin has fluctuated due to product mix changes, with core BGM business maintaining a stable gross margin above 65% from 2014-2022 [3][136] International Expansion - The company has expanded its global presence, with products sold in 135 countries and regions, and registered in 85 countries [1][75] - The acquisition of Trividia and PTS has strengthened the company's overseas sales channels, particularly in the US market [147][148] - The company's CGM product is expected to gain market share in Europe and the US, leveraging its cost advantage and established distribution networks [83][91] Competitive Landscape - In the domestic BGM market, the company holds a 12.6% market share, ranking third overall and first among domestic brands [128][130] - The company's CGM product is positioned to compete with international brands like Dexcom and Abbott, with a focus on cost-effectiveness and technological innovation [74][87]