Citi Upgrades MicroPort Scientific (00853.HK) to 'Buy' with Target Price Raised by 89% to HK$66

Source: Zhitong Finance Network

Zhitong Finance APP learns that,CitibankRelease research report, willMicroPort Medical(00853) Rating upgraded from “Neutral” to “Buy,” with target price raised to 34.96HKDrose 89% to HK$66.

The report stated that the company's revenue for the previous year decreased by 18% year-on-year, turning from profit to loss during the period, with a net loss of $191 million, compared to a net profit of $46 million in 2019; the gross profit margin also dropped from 71.1% in 2019 to 67.2%.

The bank stated that the company’s cardiovascular interventional product revenue fell by 45% year-on-year during the period, which the company attributed primarily to the impact of the pandemic and price adjustments resulting from centralized procurement policies. Last year, revenue from the orthopedic medical device business in mainland China grew by 10%, while revenue outside mainland China declined by 17%. Management expects a recovery in this segment this year, with target revenue growth rates of 25%–30% and 40%–45%, respectively.

Management expects total revenue to rebound this year, returning to a growth rate of approximately 20% to 25%. The firm maintains a positive outlook on the company’s long-term development and cost advantages, expressing confidence that MicroPort CardioFlow (02160) will become a leading enterprise in the Chinese market following its spin-off listing. It also believes that the company will subsequently spin off other businesses to unlock additional value.