Core Viewpoint - Zhongtai International has set the target price for Weigao Co., Ltd. (01066) at HKD 5.94, maintaining a "Buy" rating while adjusting revenue forecasts for 2025-2027 down by 5.2%, 5.9%, and 6.0% respectively, and net profit forecasts down by 6.4%, 5.4%, and 5.8%, although both revenue and profit are still expected to achieve positive growth [1] Group 1 - The company achieved positive revenue growth in the first three quarters of 2025, with a 2.6% year-on-year increase in Q3 revenue to RMB 3.26 billion, leading to a total revenue increase of 0.9% to approximately RMB 9.81 billion for the first three quarters, slightly below expectations [2] - The medical device and pharmaceutical packaging segments were impacted by the centralized procurement of low-value consumables and syringe procurement, but sales of orthopedic products are expected to improve in the second half of the year, while sales of interventional and blood management products continue to grow rapidly [2] Group 2 - The pharmaceutical packaging business experienced a slight decline in revenue due to centralized procurement of syringes, with a year-on-year decrease of 0.1% in the first half and only low single-digit growth in Q3; revenue forecasts for the pharmaceutical packaging business for 2025-2027 have been adjusted down by 8.9%, 13.5%, and 13.4% respectively [3] - The impact of centralized procurement on the medical device segment has largely been reflected, with the expectation that sales revenue will gradually recover starting in 2026 as the nationwide implementation of low-value consumables procurement has been completed [4] Group 3 - The orthopedic business is expected to recover in the second half of the year as the company shifts its sales model from direct sales to distribution in 2025; after a 1.6% year-on-year decline in sales revenue in the first half due to the adjustment period with distributors, Q3 sales revenue for this segment increased by approximately 10% [5]

Core Viewpoint - Zhongtai International has set a target price of HKD 5.94 for Weigao Group (01066) and assigned an "Accumulate" rating, while adjusting revenue and net profit forecasts for 2025-2027 downwards, yet still expecting positive growth in both metrics [1] Group 1: Revenue Performance - The company achieved a year-on-year revenue increase of 2.6% to RMB 3.26 billion in Q3 2025, contributing to a total revenue of approximately RMB 9.81 billion for the first three quarters, reflecting a slight year-on-year growth of 0.9% [1] - Despite slightly lower-than-expected revenue, all segments are expected to show positive growth, with orthopedic product sales improving in the second half of the year [1] Group 2: Impact of Price Collection - The drug packaging business experienced a slight revenue decline of 0.1% year-on-year in the first half of the year due to the impact of centralized procurement of syringe products, with only low single-digit growth in Q3 [2] - The revenue forecasts for the drug packaging business for 2025-2027 have been adjusted downwards by 8.9%, 13.5%, and 13.4% respectively due to ongoing impacts from centralized procurement [2] Group 3: Medical Device Sector - The medical device sector has been affected by centralized procurement of low-value consumables since the second half of 2022, leading to revenue impacts starting in 2023 [3] - However, as the centralized procurement has been fully implemented nationwide, the price reduction effects are expected to be largely reflected, with a gradual recovery in sales revenue anticipated from 2026 [3] Group 4: Orthopedic Business Recovery - To boost orthopedic product sales, the company plans to shift its sales model from direct sales to distribution in 2025, which initially led to a 1.6% year-on-year decline in sales revenue during the first half of the year due to a transition period with distributors [4] - Sales revenue for the orthopedic segment improved by approximately 10% year-on-year in Q3, indicating a recovery in the second half of the year [4]