20250320-招银国际-瑛泰医疗-01501.HK-Solid_growth_with_margin_improvement_5页_1023kb

INT Medical (1501 HK) Summary

Core Content

INT Medical, listed on the Hong Kong Stock Exchange with ticker 1501 HK, reported solid growth in 2024 despite challenges from Value-Based Pricing (VBP) and increased competition in its CDMO business. The company achieved revenue growth of 13.2% YoY to RMB852 million, slightly below the estimate, but saw a significant improvement in gross margin, which rose by 5 percentage points to 63.1%. This margin improvement was driven by enhanced capacity utilization, increased automation, and cost-reduction initiatives. As a result, attributable net profit increased by 22.7% YoY to RMB192 million, with a net profit margin of 20.02%.

Main Points

• Revenue Growth:

  • 2024: RMB852 million (+13.2% YoY)
  • 2025E: Expected to grow by 20.4% YoY to RMB1,025 million
  • 2026E: Expected to grow by 19.5% YoY to RMB1,225 million
  • 2027E: Expected to grow by 14.1% YoY to RMB1,398 million

• Net Profit Growth:

  • 2024: RMB192 million (+22.7% YoY)
  • 2025E: Expected to grow by 7.5% YoY to RMB206 million
  • 2026E: Expected to grow by 18.7% YoY to RMB245 million
  • 2027E: Expected to grow by 14.4% YoY to RMB280 million

• Gross Margin:

  • 2024: 63.1%
  • 2025E: 62.00%
  • 2026E: 61.50%
  • 2027E: 61.20%

• Overseas Sales:

  • As of end-2024, INT Medical expanded its overseas customer base to 281 across 86 countries and regions.
  • Overseas revenue reached RMB253 million, accounting for 29.6% of total sales.
  • Revenue from markets outside the US and Europe (excluding agent export) grew by 31.7% YoY.

• Earnings Forecast:

  • The company maintains a BUY rating with a Target Price of HK$33.68.
  • The previous target price was HK$35.04.
  • The current price is HK$26.95, with a 25.0% upside potential.

• Valuation Metrics:

  • P/E (2025E): 21.4
  • P/B (2025E): 2.2
  • P/E (2026E): 18.0
  • P/B (2026E): 2.0
  • P/B (2027E): 1.7

• DCF Valuation:

  • Based on a 9-year DCF model with a terminal growth rate of 2.0% and WACC of 10.73%, the equity value is estimated at HK$5,928 million.

Key Information

• Shareholding Structure:

  • Kindly Holding: 25.5%
  • Huaige Health Investment: 8.8%

• Stock Data:

  • Market Cap: HK$4,743.2 million
  • Total Issued Shares: 176.0 million

• Share Performance:

  • 1-month: -0.6%
  • 3-months: -0.6%
  • 6-months: -4.6%

• Financial Highlights:

  • Net gearing: Decreased from -27.3% in 2022A to -19.6% in 2027E.
  • ROE: Increased from 9.7% in 2023A to 11.7% in 2027E.
  • Operating margin: Slightly declined from 25.4% in 2024A to 22.8% in 2027E.
  • Net profit margin: Fluctuated slightly, from 20.02% in 2024A to 20.02% in 2027E.

• Sensitivity Analysis:

  • The equity value is sensitive to changes in WACC and terminal growth rate. At a WACC of 10.73% and terminal growth rate of 2.0%, the equity value is HK$5,928 million.

• Risk-Adjusted DCF Valuation:

  • The company's valuation is based on a 9-year DCF model, with a terminal growth rate of 2.0% and WACC of 10.73%.

Analyst Ratings

• BUY: Indicates potential return of over 15% over the next 12 months.
• HOLD: Indicates potential return of +15% to -10% over the next 12 months.
• SELL: Indicates potential loss of over 10% over the next 12 months.
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark.
• MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark.
• UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark.

Important Disclosures

• The report is prepared by CMB International Global Markets Limited (CMBIGM), a wholly owned subsidiary of CMB International Capital Corporation Limited.
• CMBIGM does not provide individually tailored investment advice and recommends that investors independently evaluate particular investments.
• The report may be subject to change without notice and may not be reproduced or distributed without prior written consent.
• The report is intended solely for the use of intended recipients and is not an offer or solicitation to buy or sell any security.

Legal & Regulatory Notes

• The report is provided in compliance with relevant regulations and is not suitable for all investors.
• In the United Kingdom, the report is provided only to persons falling within Article 19(5) of the Financial Services and Markets Act 2000.
• In the United States, the report is not intended for distribution to individuals, but only to "major US institutional investors."
• In Singapore, the report is distributed by CMBI (Singapore) Pte. Limited (CMBISG), an Exempt Financial Adviser regulated by the Monetary Authority of Singapore.