20230427-招银国际-泰格医药-300347.SZ-Healthy_non-COVID_revenue_growth_in_1Q23_5页_750kb

Tigermed (300347 CH) 1Q23 Performance and Outlook Summary

• Revenue and Profit: Tigermed's Q1 2023 revenue declined 0.7% YoY to RMB1,805 million, but attributable recurring net income increased 0.7% YoY to RMB381 million, contributing to 19.2% of full-year estimates. Excluding COVID-related revenue, 1Q23 revenue would have grown 27-28% YoY, highlighting non-COVID revenue resilience.

• Operational Recovery: Full business resumption after COVID disruptions in January 2023 led to margin improvements; gross profit margin reached 39.7%, up 1.6 points QoQ due to reduced COVID project reliance. Management projects margins above 41% if excluding pass-through COVID revenue.

• New Orders and Growth: New orders signed in 1Q23 remained largely flat YoY, but management anticipates a significant pickup in 2Q23 and beyond as post-pandemic proposal requests recover. Sequential improvement in revenue and margins expected in 2Q23.

• Strategic Focus: Tigermed prioritizes globalization, evidenced by acquisitions like the Croatia CRO Marti Farm and plans to double its US clinical operations team by 2023. Targets underserved markets and Chinese developers seeking developed regions, driving additional demand in Southeast Asia and Latin America.

• Financial Health: Net operating cash flow plummeted 91% YoY to RMB29 million due to payment delays and high base effects; management envisions rebound from 2Q23. Current P/E ratio is 43.1x (adjusted), reflecting slower growth projections in forecasts.

• Valuation and Rating: Maintain BUY rating with revised target price from RMB134.24 to RMB123.50 (4.3% downside based on current price RMB92.74), driven by a 10-year DCF model (WACC 10.6%, terminal growth 3.0%). Revenue and earnings growth projections for FY23E and beyond show steady expansion amid post-pandemic adaptation.