The Zhitong Finance App learned that UBS released a research report stating that it maintained Yao Ming Kangde (02359)'s “neutral” rating and lowered the 2024-2026 earnings forecast by 4%, 5%, and 5% to 2026 to $3.47, $3.73 and RMB 3.99, and the target price was lowered from HK$44 to HK$40.1 based on first-quarter performance.

According to the report, the company's first-quarter performance was poor, with revenue falling 11% year-on-year to 7.98 billion yuan, lower than the bank's forecast of 8.83 billion yuan and the market's general forecast of 8.41 billion yuan; net profit fell 10.4% to 1.94 billion yuan, also lower than UBS and the market forecast of 2.13 billion yuan and 2.04 billion yuan.

The bank said that excluding the impact of COVID-related revenue, Yao Ming Kangde's revenue in the first quarter fell 1.8% year on year. Among them, revenue from the US and European markets increased by 0.4% and 3.9%, while revenue from the Chinese market fell 3.3%. Management currently maintains the 2024 revenue target of 38.3 billion yuan to 40.5 billion yuan. Excluding COVID-related estimates, annual revenue will increase 2.7% to 8.6% year over year, and capital expenditure and free cash flow targets will remain unchanged.