CHUNLI MEDICAL(688236) Guoxin Securities·2025-06-03 08:15Investment Rating - The investment rating for the company is "Outperform the Market" [5][3]. Core Views - The company's performance was impacted by the national centralized procurement, but it began to stabilize in the first quarter of 2025. In 2024, the company achieved revenue of 806 million (down 33.3%) and a net profit of 125 million (down 55.0%). The overseas revenue reached 353 million (up 78.31%), accounting for 43.8% of total revenue, becoming a significant growth driver [1][6]. - The company has established a strong brand presence in the joint prosthesis market and is expected to see new growth from sports medicine and other new product lines. The risks from centralized procurement are gradually being alleviated [3][5]. Summary by Sections Financial Performance - In 2024, the company reported a gross margin of 66.6% (down 5.9 percentage points) and a net margin of 15.5% (down 7.5 percentage points). The first quarter of 2025 saw a recovery in gross margin to 66.7% and net margin to 25.2% [2][12]. - The company’s revenue and net profit forecasts for 2025-2027 are adjusted to 222 million, 273 million, and 331 million respectively, with expected growth rates of 77.5%, 23.1%, and 21.2% [3][21]. Research and Development - The company maintained high R&D investment, totaling 133 million in 2024, despite a 15.5% decrease year-on-year. New products have been approved, including hip joint prostheses and 3D printed titanium alloy anchors, enhancing the product line [2][15]. Market Position - The company has successfully won bids for its hip and knee joint systems in the national procurement project, ensuring stable supply despite facing price and margin pressures [1][6]. - The company is the first in China to manufacture porous tantalum metal implants, breaking foreign monopolies, and is expanding its product lines in sports medicine and orthopedics [2][15].