CHUNLI MEDICAL(SH:688236) HTSC·2025-04-01 10:59Investment Rating - The investment rating for the company is "Buy" [7][4]. Core Views - The company is experiencing pressure on its domestic revenue due to centralized procurement policies, leading to a significant decline in domestic sales, while overseas performance remains strong with a notable increase in international market contributions [2][4]. - The company is expected to benefit from the recovery of its performance post-price adjustments from centralized procurement, with a focus on increasing sales volume [1][4]. Summary by Sections Financial Performance - For 2024, the company's revenue is projected at 806 million RMB, with a year-on-year decline of 33.3%. The attributable net profit is expected to be 125 million RMB, down 55.0% year-on-year [1][6]. - In Q4 2024, revenue is expected to be 298 million RMB, with a year-on-year decline of 28.5% [1][3]. Domestic vs. Overseas Revenue - Domestic revenue is projected at 450 million RMB for 2024, down 55.2% year-on-year, accounting for 56.2% of total revenue. In contrast, overseas revenue is expected to reach 350 million RMB, up 78.3% year-on-year, making up 43.8% of total revenue [2][4]. Gross Margin Analysis - The gross margin for domestic operations is expected to be 67.23%, a decrease of 6.98 percentage points year-on-year, while the overseas gross margin is projected at 65.90%, an increase of 2.10 percentage points [2][3]. Expense Management - The company has managed to reduce its sales expense ratio in Q4 2024 to 25.80%, down 10.08 percentage points year-on-year, despite an overall increase in expenses for the year [3][4]. Earnings Forecast - The forecast for attributable net profit for 2025-2027 is adjusted to 240 million, 290 million, and 340 million RMB respectively, reflecting a downward revision of 28.2% and 27.5% for 2025 and 2026 compared to previous estimates [4][15]. - The expected EPS for 2025 is 0.62 RMB, with a projected PE ratio of 21.88 for the same year [6][15]. Valuation - The target price for the A-share is set at 19.83 RMB, corresponding to a PE of 32x, while the target price for the H-share is set at 11.42 HKD, corresponding to a PE of 17x [4][7].