Sinocare(SZ:300298) Huaan Securities·2024-04-28 04:30Investment Rating - The investment rating for the company is "Buy" [3] Core Views - The report increases the earnings forecast for 2024-2026, expecting revenues of 4.711 billion, 5.495 billion, and 6.384 billion yuan, with growth rates of 16.1%, 16.7%, and 16.2% respectively. The net profit attributable to the parent company is projected to be 450 million, 576 million, and 720 million yuan, with growth rates of 58.3%, 28.0%, and 24.9% respectively. The EPS is expected to be 0.80, 1.02, and 1.28 yuan, corresponding to PE ratios of 29x, 23x, and 18x for the same periods. The company is deeply engaged in the blood glucose monitoring field, with stable growth in BGM business and initial profitability in CGM, which is expected to launch in the US market in 2025, indicating high long-term growth potential [2][4]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 4.059 billion yuan, a year-on-year increase of 2.7%. The net profit attributable to the parent company was 284 million yuan, down 36.3% year-on-year. The gross margin was 54.1% [5]. - For Q1 2024, the company reported a revenue of 1.014 billion yuan, a year-on-year increase of 14.92%, and a net profit of 81 million yuan, up 35.51% year-on-year [3]. Business Segments - The BGM business remains stable, with a revenue of 2.872 billion yuan in 2023, a year-on-year growth of 6.21%. The company holds over 50% of the retail market for blood glucose meters in China, covering more than 3,500 hospitals and over 220,000 pharmacies [3][4]. - The CGM business, launched in April 2023, is expected to generate sales of 300-500 million yuan in 2024, with a target to become the market leader in China by 2025. The company is also pursuing international expansion, having received CE certification for its CGM products and working towards FDA approval for the US market by 2025 [4][5].