Jinwu Financial News | According to CMB International Research, Times Angel (06699) was founded in 2003 and is a leading provider of invisible correction solutions in China. Since 2021, it has been the brand with the largest market share in China's invisible correction market for four consecutive years. The compound growth rate of the company's revenue in 2019-2024 was as high as 23.8% (in US dollars at historical exchange rates). The bank expects that the company will benefit from the improvement of the competitive environment in the domestic market and the rapid development of overseas markets, and continue to maintain rapid growth. Revenue is expected to grow at a CAGR of 18.0% in 2024-2027.
The bank believes that the brands in the invisible correction industry are very sticky. With excellent product strength and high-quality clinical service capabilities, the company can deeply bind doctors' resources, and it is expected that the strong will continue to expand its market share. Furthermore, the overseas business has basically completed the early stage of high investment and customer acquisition. Profitability is improving rapidly, and ASP and gross margin continue to increase. Given the huge size of the international market, it is expected to be the core driver of the company's long-term growth.
The bank is optimistic that Times Angel's overseas business will continue to grow strongly. The compound overseas revenue growth rate is 42.8% in 2024-27E. The bank expects a compound growth rate of 3.3% in domestic revenue in 2024-27E, and operating profit margins will remain stable. Based on the SOTP segment valuation method, mature domestic businesses are given 18 times 2025E PE, and overseas businesses in the rapid expansion stage are given 6 times 2025E PS, corresponding to a target price of HK$69.55. The first coverage gives a “buy” rating.
