SHINVA(SH:600587) Huachuang Securities·2024-11-05 13:40Investment Rating - The report maintains a "Recommended" investment rating for Xinhua Medical (600587) with a target price of 22 CNY, while the current price is 17.64 CNY [2]. Core Views - The company's Q3 revenue remained flat at 74.23 billion CNY, with a net profit of 6.17 billion CNY, reflecting a 6.63% increase. The net profit margin improved to 5.93% from 5.35% in the previous year [2][3]. - The medical device sector is under pressure due to a decline in bidding amounts for infection control projects compared to the same period last year, leading to delayed procurement demand from hospitals [2]. - The company's gross margin slightly decreased to 25.53%, attributed to a slowdown in revenue growth from the high-margin medical device segment [2]. - The report forecasts a steady increase in net profit for the years 2024 to 2026, with expected figures of 10.4 billion CNY, 12.8 billion CNY, and 14.1 billion CNY respectively, corresponding to a PE ratio of 16 times [2][3]. Summary by Sections Financial Performance - Q3 2024 revenue was 74.23 billion CNY, showing a 1.45% year-on-year increase. The net profit was 6.17 billion CNY, up 6.63% year-on-year, while the net profit margin improved to 5.93% [2]. - The company’s gross margin was reported at 25.53%, a decrease of 2.78 percentage points, while the net profit margin increased by 0.58 percentage points [2]. Future Projections - The report projects revenue growth for 2024E at 10,227 million CNY, with a year-on-year growth rate of 2.1%. The net profit for 2024E is expected to be 708 million CNY, reflecting an 8.3% increase [3]. - The estimated earnings per share (EPS) for 2024E is 1.17 CNY, with projections of 1.37 CNY for 2025E and 1.70 CNY for 2026E [3]. Valuation Metrics - The report assigns a PE ratio of 16 for the current valuation, with a target price of 22 CNY based on the expected growth in net profit and earnings per share [2][3].