Citi first gave Corning Hospital (02120.HK) a neutral rating, raising its target price from 46 yuan to 48 yuan. Its share price fell 10%, the current price is 15 times the 2016 EV/EBITDA, the valuation is attractive, coupled with the strong implementation of the group, and its school of psychiatry in partnership with Wenzhou Medical University, strengthening training can relieve the pressure of hiring more staff in the long term.

The bank raised its 2016 / 17 revenue forecast by 0.3 per cent and 5 per cent, reflecting the contribution of several hospitals operating in the third quarter of this year, but expected profits came under pressure, lowering its 2016 / 17 EBITDA forecast by 7 per cent and 3 per cent, based on the 2016 EV/EBITDA forecast 19 times.

The bank pointed out that Corning Hospital is the most competitive psychiatric specialist hospital in the mainland and has a good position in the psychiatric market with low penetration. In view of the professional reputation and the new health care investment fund, it is believed that hospitals will speed up their expansion and establish a unique human resources system that can become a major mental hospital group in the long run.