MTM(SH:688029) HTSC·2025-08-12 05:07Investment Rating - The report maintains a "Buy" rating for the company with a target price of 117.83 RMB [7][8]. Core Insights - The company demonstrated stable revenue growth with a 1H25 revenue of 15.65 billion RMB, reflecting a year-on-year increase of 17.4% [1]. - The acquisition of Creo Medical S.L.U. (CME) has contributed positively to the company's performance, with 1H25 overseas revenue reaching 9.1 billion RMB, a 45% increase year-on-year [2]. - Domestic revenue faced challenges due to expanded procurement coverage, resulting in a 6.6% decline to 6.6 billion RMB in 1H25, but there are expectations for marginal improvement due to "anti-involution" measures in procurement [3]. Summary by Sections Financial Performance - 1H25 revenue and net profit were 15.65 billion RMB and 3.63 billion RMB respectively, with year-on-year growth of 17.4% and 17.0% [1]. - The company’s gross margin in 1H25 was 64.89%, down 3.04 percentage points year-on-year, primarily due to margin pressure from procurement [4]. Overseas Market Expansion - The company’s overseas revenue accounted for 58% of total revenue in 1H25, with significant growth in the European, Middle Eastern, and African markets, where revenue increased by 89% [2]. - The integration of CME is progressing well, enhancing the company's market presence in Europe [2]. Domestic Market Challenges - Domestic revenue was impacted by increased competition and procurement pressures, leading to a 6.6% decline in 1H25 [3]. - The company is adapting its sales strategy to improve performance in the domestic market, with expectations for gradual recovery as procurement policies evolve [3]. Future Projections - The report projects net profits for 2025-2027 to be 6.71 billion RMB, 8.12 billion RMB, and 9.72 billion RMB respectively, indicating a compound annual growth rate of approximately 21% [5]. - The target price reflects a 33x PE valuation for 2025, compared to a peer average of 27x [5].