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Shanghai Kindly Medical Instruments Co., Ltd. Achieves Margin Improvement and Global Expansion, Retains Buy Rating

Shanghai Kindly Medical Instruments Co., Ltd. Achieves Margin Improvement and Global Expansion, Retains Buy Rating

Analyst Jill Wu of CMB International Securities maintained a Buy rating on Shanghai Kindly Medical Instruments Co., Ltd. Class H (1501Research Report), with a price target of HK$33.68.

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Jill Wu’s rating is based on several positive developments within Shanghai Kindly Medical Instruments Co., Ltd. The company demonstrated a significant improvement in its gross margin, which rose by 5 percentage points to 63.1% in 2024. This enhancement was largely due to increased capacity utilization and automation, as well as the commencement of new production facilities in Shanghai and Zhuhai. These operational improvements have contributed to a reduction in unit costs, despite the challenges posed by the VBP policy and competitive pressures.
Furthermore, the company has shown a promising outlook for its overseas sales. By the end of 2024, Shanghai Kindly Medical Instruments expanded its international customer base significantly, with overseas revenue growing by 24.2% year-over-year. This growth was particularly strong in markets outside the US and Europe, indicating a robust global expansion strategy. With these factors in mind, Jill Wu maintains a Buy rating, expecting continued revenue growth and profitability improvements in the coming years.

1501’s price has also changed slightly for the past six months – from HK$28.900 to HK$27.100, which is a -6.23% drop .

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