Analyst Jill Wu of CMB International Securities maintained a Buy rating on Shanghai Kindly Medical Instruments Co., Ltd. Class H (1501 – Research 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 .