Sinocare(300298) 东吴证券·2024-04-28 06:30Investment Rating - The report maintains a "Buy" rating for the company, citing confidence in the future growth of its CGM (Continuous Glucose Monitoring) products [13] Core Views - The company achieved revenue of 4.059 billion yuan in 2023, a year-on-year increase of 2.69%, and net profit attributable to the parent company of 284.4 million yuan, a year-on-year decrease of 36.31% [2] - The overseas subsidiary Trividia, which was impacted by U.S. healthcare policy changes, showed significant improvement in the second half of 2023 and is expected to turn profitable in 2024, reducing impairment risks [2] - The company's CGM product achieved sales exceeding 100 million yuan in its first year of launch, with strong potential for domestic and international market expansion [2] - The company's traditional BGM (Blood Glucose Monitoring) business remains stable, with a projected revenue growth of 10-15% in 2024 [2] - The company's cost control measures have been effective, with reductions in sales, management, and R&D expense ratios in Q1 2024 [2] Financial Performance and Forecasts - Revenue is expected to grow from 4.059 billion yuan in 2023 to 6.093 billion yuan in 2026, with a compound annual growth rate (CAGR) of 14.06% to 15.23% [2] - Net profit attributable to the parent company is forecasted to increase from 284.4 million yuan in 2023 to 621.61 million yuan in 2026, with a CAGR of 44.96% to 18.68% [2] - EPS (Earnings Per Share) is projected to rise from 0.50 yuan in 2023 to 1.10 yuan in 2026 [2] - The company's P/E ratio is expected to decrease from 45.97 in 2023 to 21.03 in 2026, reflecting improved profitability [2] CGM Product Development - The company's CGM product, utilizing third-generation direct electron transfer technology, has achieved MARD (Mean Absolute Relative Difference) values of 8.71% and 7.45%, positioning it as a leader in the industry [2] - The company has obtained registrations for its CGM product in seven regions, including the UK and Italy, and is progressing with clinical trials in the U.S., with FDA approval expected by Q2-Q3 2025 [2] Traditional Business and Cost Management - The company's traditional BGM business is expected to grow steadily, with a focus on higher-margin products [2] - In Q1 2024, the company reduced its sales, management, and R&D expense ratios to 24.66%, 6.49%, and 9.43%, respectively, reflecting effective cost management [2] Valuation and Market Position - The company's current market capitalization corresponds to a P/E ratio of 32/25/21X for 2024-2026, indicating a favorable valuation relative to its growth prospects [2] - The company's CGM product is well-positioned to capture market share in both domestic and international markets, leveraging its established BGM market presence and product advantages [2]