INTCO MEDICAL(SZ:300677) China Post Securities·2024-08-08 08:00Investment Rating - The report maintains a "Buy" rating for the company [2]. Core Views - The company is the largest disposable glove supplier in China and globally, focusing on medical consumables, rehabilitation equipment, and physiotherapy care, with personal protective equipment accounting for 89% of its revenue [2][12]. - The company is expected to experience significant revenue growth from 2024 to 2026, with projected revenues of 8.545 billion yuan, 9.776 billion yuan, and 11.753 billion yuan, representing year-on-year growth rates of 24%, 14%, and 20% respectively [2][7]. - The company’s net profit is projected to increase significantly, with expected figures of 1.293 billion yuan, 1.692 billion yuan, and 2.182 billion yuan for the same period, reflecting year-on-year growth rates of 238%, 31%, and 29% respectively [2][7]. Summary by Sections Company Overview - The company was established in 1993 and has become a leading disposable glove supplier globally, serving over 10,000 clients across more than 120 countries [12]. - The company’s first major shareholder, Liu Fangyi, has extensive industry experience and has been instrumental in the company's growth [12][14]. Market Dynamics - The disposable glove industry is recovering from a period of oversupply, with expectations for a turnaround in 2024 as inventory levels normalize [2][16]. - The average export price of nitrile gloves has stabilized, with a 26% month-on-month increase in export volume noted in June 2024 [3][20]. Financial Performance - The company reported a revenue of 6.919 billion yuan in 2023, a 4.61% increase year-on-year, but faced a net profit decline of 39.12% due to market conditions [12][16]. - In Q1 2024, the company achieved a revenue of 2.203 billion yuan, a 40.06% increase year-on-year, and a net profit of 238 million yuan, reflecting a 255.63% increase [12][15]. Competitive Advantages - The company maintains a high gross margin in the nitrile and PVC glove segments, benefiting from upstream control of raw materials and energy cost advantages [4][16]. - The company is expanding its global customer base and enhancing brand visibility to mitigate the impact of tariffs and market fluctuations [5][16]. Future Outlook - The global market for disposable gloves is projected to grow, with an expected CAGR of 7.8% from 2019 to 2025, particularly in the nitrile glove segment [19][20]. - The company is well-positioned to capitalize on this growth, with a focus on innovation and cost control strategies [4][16].