CHUNLI MEDICAL(SH:688236) Bank of China Securities·2025-04-03 06:48Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance in the next 6-12 months [1][5]. Core Views - The company reported a revenue of 806 million RMB for 2024, a decline of 33.32% year-on-year, and a net profit of 125 million RMB, down 55.01% year-on-year. The company plans to distribute a cash dividend of 0.49 RMB for every 10 shares [5]. - The report suggests that the risks associated with centralized procurement have gradually been released, and the company's valuation has reached a reasonable level, supporting a long-term positive outlook [5][9]. - The company has faced pressure from centralized procurement renewals, which have led to a decrease in product prices, impacting overall performance. However, the report anticipates that the effects of these pressures will gradually diminish [9][10]. Summary by Sections Financial Performance - The company’s main revenue is projected to recover to 937 million RMB in 2025, with a growth rate of 16.3%. The net profit is expected to increase to 153 million RMB, reflecting a growth rate of 22.1% [8]. - The report highlights a significant reduction in sales expenses, with a sales expense ratio of 25.80% in Q4 2024, down from 35.88% year-on-year and 40.56% quarter-on-quarter [9]. Research and Development - The company invested 133 million RMB in R&D in 2024, maintaining a high level of investment to enhance competitiveness. The focus is on new materials and product lines, including surgical robots and sports medicine [9][10]. Valuation Metrics - As of April 2, 2025, the company's total market capitalization is 58 billion RMB, with projected P/E ratios of 38.1 for 2025 and 31.8 for 2026 [9][10]. - The report indicates that the market has already priced in the pessimistic expectations regarding the company, suggesting that the current valuation is relatively low [9].