20230901-招银国际-云康集团-02325.HK-Healthy_growth_in_non-COVID_business_5页_1mb

Yunkang Group (2325 HK) - Equity Research Summary

Key Points

• Performance: Yunkang Group's H123 results were negatively impacted by declining COVID-19 testing demand post-China reopening. Revenue fell 65.4% YoY to RMB476.9mn, while net profit dropped 79.2% to RMB48.7mn, primarily due to reduced diagnostic COVID-19 test demand. Non-COVID business revenue grew 28.2% YoY, driven by business expansion and service network growth.

• Growth Strategies:

  • Expanded to 410 on-site diagnostic centers and increased independent laboratories to 12, serving more medical institutions.
  • Launched digital operational systems to enhance efficiency and cost control for hospitals.

• Recommendation: Maintain "BUY" rating based on potential for non-COVID business growth, with revised estimates: revenue projected at RMB1,006mn for 2023E/24E, target price reduced to HK$16.01.

• Financial Highlights:

  • H123 P/E ratio: 87.8x; attributable net profit margin: 10.2% YoY.
  • DCF valuation based on WACC 9.6% and terminal growth rate 3.0%, yielding HK$16.01.

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