Credit Suisse Downgrades MicroPort Medical to Underperform with Target Price Cut to HK$26

Original Title: Credit Suisse Downgrades MicroPort to Underperform, Cuts Target Price to HK$26 Source: Sina.com

Credit Suisse issued a report downgrading MicroPort’s rating from “Neutral” to “Underperform,” lowering its target price from HK$35.2 to HK$26, and cutting its earnings forecasts for the next year and 2022 by 40% and 30%, respectively, to reflect the impact of centralized procurement on next year’s earnings performance.

On November 5 this year, the National Healthcare Security Administration of China conducted its first centralized bulk procurement of high-value medical consumables in Tianjin, focusing on coronary stents. Among the 10 selected products, the average price of coronary stents was approximately RMB 700, representing an average price reduction of about 94%.

The bank stated that MicroPort’s Firebird2 and Firekingfisher stents were selected, with winning bid prices being very low. It is estimated that this will have an 85% impact on the Group’s drug-eluting stent (DES) sales in China next year, and a 28% impact on revenue. The impact on net profit is expected to be even greater, as the price reduction of these products will affect gross profit margins.