Healthcare (SH:603313) Huafu Securities·2025-11-07 11:34Investment Rating - The report initiates coverage with a "Buy" rating for the company [6]. Core Views - The company has reached an inflection point in profitability, with significant growth in net profit and revenue expected in the coming years, driven by multiple factors including improved overseas demand and brand development [3][6]. Summary by Sections Company Overview - The company, established in 2003, focuses on sleep products and has a global brand presence, with production bases in various countries including the US, Serbia, Thailand, and Spain [17][18]. - The company aims to enhance human deep sleep and has developed a range of products including memory foam mattresses and smart beds [17]. Financial Overview - As of the first three quarters of 2025, the company achieved revenue of 6.76 billion yuan, a year-on-year increase of 10.3%, and a net profit of 161 million yuan, up 205% year-on-year [3][30]. - The company has completed a share buyback of 19,406,350 shares, accounting for 3.4% of total shares, intended for employee stock ownership plans or equity incentives [3][22]. External Sales: Three Driving Forces - Driving Force 1: Recovery in overseas furniture demand, particularly in the US mattress market, is expected as interest rates decline and housing sales stabilize [4][44]. - Driving Force 2: The company is capitalizing on the growth of its online brands, with online sales accounting for 31% of overseas revenue, and a 76% increase in revenue from its EGO HOME brand in the first three quarters of 2025 [4][66]. - Driving Force 3: The US factory has turned profitable, with a significant increase in capacity utilization, and the company is expected to benefit from economies of scale [4][44]. Domestic Sales: Steady Development - Domestic sales account for approximately 17% of total revenue, with a focus on building a comprehensive home furnishing ecosystem through various product lines [5][30]. Profit Forecast and Investment Recommendations - The company is projected to achieve net profits of 230 million yuan, 380 million yuan, and 490 million yuan for 2025, 2026, and 2027, respectively, with significant year-on-year growth rates [6][30]. - The current stock price corresponds to a P/E ratio of 23X for 2025 and 14X for 2026, which is slightly below the average of comparable companies [6].