Winner Medical(300888) 华泰证券·2024-12-12 02:15Investment Rating and Target Price - The report initiates coverage on Winner Medical with a "Buy" rating and a target price of RMB 48.44, based on a 25-year 28X target PE [1] - The target price implies a 30.2% upside from the closing price of RMB 37.20 as of December 10, 2024 [10] Core Investment Thesis - Winner Medical is positioned as a dual-driven "consumer + medical" health enterprise, with a clear upward inflection point in its operations [1] - The consumer segment is expected to accelerate growth in 2024, driven by product leadership, integrated marketing, and channel expansion [1] - The medical segment has fully digested the high base of infection protection products, with Q3 2024 returning to normalized growth, and regular products are expected to benefit from industry expansion [1] Consumer Segment Highlights - The consumer segment, led by Purcotton, is gaining momentum with strong growth drivers [2] - Product innovation and SKU optimization are improving operational efficiency [2] - Marketing efforts centered on the "cotton ≠ synthetic" concept are enhancing brand recognition [2] - Online and offline channels are expanding, with Q1-Q3 2024 revenue growth of +7.1%/+13.8%/+20.6% YoY [2] - The consumer segment is expected to maintain strong growth potential, with ample room for channel expansion [26] Medical Segment Highlights - The high base of infection protection products has been fully digested, with Q1-Q3 2024 revenue declining by -68.1% YoY to RMB 260 million [3] - Q1-Q3 2024 revenue for infection protection products declined by -87.6%/-19.8%/+3.1% YoY, indicating a return to normal growth [3] - Regular medical products are accelerating growth, with Q1-Q3 2024 revenue increasing by +4.3%/+11.0%/+14.3% YoY, driven by product innovation and channel expansion [3] Equity Incentive Plan - The company plans to grant 7.476 million restricted shares to 308 employees, accounting for 1.28% of the total share capital [4] - The performance targets for 2025-2027 are set at 13% (trigger) and 18% (target) YoY revenue growth, with the same requirements for both medical and consumer segments [4] Financial Forecasts and Valuation - The company is expected to achieve net profits of RMB 818 million, RMB 1.006 billion, and RMB 1.186 billion in 2024-2026, with YoY growth of +41.0%/+22.9%/+18.0% [5] - EPS is projected to be RMB 1.41, RMB 1.73, and RMB 2.04 for 2024-2026, respectively [5] - The target PE of 28X for 2025 is based on the average PE of comparable companies [5] Market Differentiation - The report differs from market concerns about the growth potential of both segments [26] - The consumer segment is expected to maintain strong growth momentum, with Q1-Q3 2024 revenue increasing by +13.7% YoY to RMB 3.36 billion [26] - The medical segment has fully digested the high base of infection protection products, with regular products expected to benefit from both internal and external growth drivers [27] Business Overview - Winner Medical operates in both the medical and consumer sectors, with a focus on providing one-stop medical consumable solutions and high-quality cotton-based consumer products [22] - The medical segment covers wound care, infection protection, and health care products, with extensive coverage in domestic and international markets [22] - The consumer segment, under the Purcotton brand, offers a wide range of cotton-based products, including cotton towels, feminine care, baby care, and home textiles [22] Historical Performance and Future Outlook - The company has experienced significant growth over the past three decades, transitioning from OEM medical supplies to a dual-driven "medical + consumer" business model [32][33] - The consumer segment has become a core driver of long-term growth, with over 5.242 million members and 444 offline stores as of H1 2024 [33] - The company is expected to benefit from the recovery of regular medical products and the continued growth of the consumer segment, with a clear inflection point in operations [46]