Key investment points

The iHealth brand has gained a foothold in the US, and it has taken a leading position when listed by the Joint Inspection Service. During the global outbreak in 2020, iHealth quickly launched COVID-19 antigen testing products, won an order from the US government, and became a well-known brand in the US while earning sufficient cash; the company obtained the FDA Emergency Use Authorization (EUA) triple household test (OTC) kit on May 8, 2024, becoming the fifth certified company. In Q3 2024, according to incomplete statistics from Amazon crawler data, iHealth's triple test products have become the best seller of similar products. We believe that 2024 is a year to officially get rid of COVID-19 disruptions. It is a new starting point for Jiu'an Healthcare. The sales situation with the launch of the three joint inspection products has once again established the company's leading position in the US. In the future, with the approval of new products, it is expected that the iHealth brand and channel capabilities will once again achieve good results.

CGM has a broad market space, and the company is expected to use its brand advantages to seize market share. The global CGM market continues to grow. The compound annual growth rate (CAGR) reached 22.34% in 2015-2020, and is expected to maintain a compound annual growth rate of 20.3% in 2020-2030. The company's CGMS has now been prototyped and is in the pre-clinical phase. The company will focus its efforts and resources to accelerate the progress of this project. Judging from the competitive pattern of the global market, Abbott and Dekang are still the dominant market. In the future, Jiu'an Medical is expected to seize a certain market share in the US market and the world through the brand and channel advantages accumulated in the early stages of the iHealth brand, and become a strong growth point for the company's future product layout.

Internet medical O2O creates a new model for chronic disease management. The new “O+O” model for diabetes diagnosis, treatment and care is one of Jiu'an Medical's core strategies. It comprehensively uses new technology such as mobile Internet, Internet of Things, cloud, and artificial intelligence to extend the management and services of diabetics from hospitals to families, from offline to online, forming a closed loop of standardized management of the entire course of the disease with integrated in-hospital and off-line, and integrated software and hardware services to achieve patient-centered service supply. In the international market, the US subsidiary of Jiu'an Medical has cooperated with about 60 clinics through this new model to care for about 0.015 million patients.

Profit forecast and investment rating: We expect the company's 2024-2026 net profit to be 1.509/1.54/1.734 billion yuan, EPS of 3.07/3.14/3.53 yuan, respectively. The P/E corresponding to the current stock price is 13.85/13.56/12.05 times, respectively. Jiu'an Medical Comparable Companies are Shengxiang Biology, Wanfu Biotech, and Yuyue Medical. Compared with comparable companies, Jiu'an Medical's valuation is lower; at the same time, we used the DCF model to value the company and calculated that the reasonable valuation of the company should be 34.447 billion yuan.

The company's trifecta inspection was approved in 2024. iHealth used the epidemic to launch a medical brand for use in the US. In the future, after CGM products are launched, it can open up the company's second growth curve. Growth can be expected, covered for the first time, and given a “buy” rating.

Risk warning: Product volume falls short of expectations, risk of exchange rate fluctuations, competition increases risk, and policy risk.