Double Medical(SZ:002901) Haitong Securities International·2025-05-07 09:35Investment Rating - The report initiates coverage with an "Outperform" rating for the company [1][4][13]. Core Views - The company has emerged from the impact of centralized procurement, achieving strong growth on a low base in its traditional orthopedic segment, while successfully expanding into new business areas [1][14]. - The forecasted EPS for 2025-2026 is RMB 1.24 and RMB 1.64, with a new forecast for 2027 at RMB 1.99. A target PE of 36X for 2025 is set, leading to a target price of RMB 44.64 [4][13][14]. Financial Summary - In 2024, the company is expected to achieve revenue of RMB 2.14 billion, a year-on-year increase of 39.3%, and a net profit attributable to shareholders of RMB 357 million, reflecting a 505% increase [3][14]. - For Q1 2025, revenue is projected at RMB 550 million, up 28.8%, with a net profit of RMB 103 million, an increase of 67% [3][14]. - The company’s revenue growth is attributed to the clearing of inventory adjustments from previous centralized procurement impacts, leading to a strong performance in 2024 [14][15]. Product Line Performance - The core orthopedic product lines have recovered post-centralized procurement, with trauma product sales expected to reach RMB 821 million in 2024, a growth of 43.4%, and a gross profit margin increase of 3.67 percentage points to 75.34% [15][16]. - Spine product revenue is anticipated to be RMB 388 million, a 36.9% increase, while joint products are expected to grow by 21.1% to RMB 189 million [15][16]. Non-Orthopedic Growth - The company is expanding its non-orthopedic consumables business, aiming to become a platform company in medical equipment. R&D investment in 2024 is projected at RMB 307 million, representing 14.4% of revenue [16][10]. - Revenue from minimally invasive surgical products is expected to reach RMB 363 million, a growth of 26.5%, with a gross profit margin increase of 1.77 percentage points to 78.19% [16][10].