Sinocare(300298) HTSC·2024-10-24 08:08Investment Rating - The investment rating for the company is maintained as "Buy" [1][5]. Core Views - The company reported revenue and net profit of 318.2 million and 25.5 million RMB for the first three quarters of 2024, representing a year-over-year change of +4.8% and -19.7% respectively. The decline in profit is attributed to increased R&D and sales promotion expenses [1]. - The core business of Blood Glucose Monitoring (BGM) is developing well, and sales of Continuous Glucose Monitoring (CGM) products are expanding in both domestic and EU markets, leading to a positive outlook for the company's performance in 2024 [1][2][3]. Summary by Sections Financial Performance - For 1-3Q24, the company achieved a gross margin of 55.2%, an increase of 2.2 percentage points year-over-year. The sales, management, and R&D expense ratios were 26.5%, 10.3%, and 8.8% respectively [4]. - The company expects to achieve revenue of 4.279 billion RMB in 2024, with a projected EPS of 0.57 RMB [6][11]. Business Segments - The BGM business showed stable growth, with expectations for continued upward momentum in 2024 due to strong demand for blood glucose monitoring among diabetes patients [2]. - The CGM products performed well in the domestic market, with sales exceeding 200 million RMB in the first three quarters of 2024. The company anticipates sales to exceed 300 million RMB in 2024 [3]. Profitability and Valuation - The company has adjusted its revenue expectations for the blood glucose monitoring system and increased its sales and R&D expense forecasts. The target price for 2025 is set at 34.30 RMB, based on a PE ratio of 48x [5][9].