Morgan Stanley's report pointed out that, under the continued adverse factors of anti-corruption in mainland China, it is believed that the market has already expected the weak performance of medical technology companies in the second quarter. Investors are concerned about the timetable and scale of the fiscal stimulus plan that the government will soon introduce, in order to set expectations for medical technology stocks in the second half of this year and next year. At the same time, adverse macroeconomic and policy factors may continue to drag down the growth of consumer and medical aesthetic enterprises.
Among the medical technology companies covered by the bank, it is expected that the mainland sales of Era Angel Group (06699.HK) in the first half of the year will increase by 11% year-on-year, with an average product price drop of 3%, and overseas revenue will exceed RMB 0.15 billion. MicroPort Medical (00853.HK) has announced that sales in the first half of the year are expected to increase by 17% year-on-year, in line with expectations.
In addition, the bank expects that Weigao Group (01066.HK) sales in the first half of the year will remain flat year-on-year, with profits falling mainly due to the continued impact of 'quantity-based procurement'. It is also expected that Peijia Medical (09996.HK) sales in the first half of the year will increase by 30% year-on-year; Guichuang Bio-Tech Co. (02190.HK) sales are forecasted to reach RMB 0.35 billion, with a net profit of RMB 33 million; Xian Ray Medical Technology Co. (06669.HK) sales and profit forecasts are expected to increase by 17% and 18% year-on-year, respectively; Gensight Biopharma Inc. (02407.HK) sales are expected to fall by 8% year-on-year, with a profit of RMB 27 million.
Morgan Stanley's investment ratings and target prices for medical technology stocks are listed below:
Stock | Investment Rating | Target Price (HKD)
Guichuang Bio-Tech Co. (02190.HK) | Shareholding | HKD 15.8 → HKD 16.5
Peijia Medical (09996.HK) | Shareholding | HKD 9.4 → HKD 4.5
Era Angel Group (06699.HK) | In line with the market | HKD 80.5 → HKD 78
Weigao Group (01066.HK) | In line with the market | HKD 6.6 → HKD 5.5
MicroPort Medical (00853.HK) | In line with the market | HKD 9 → HKD 7.4
Xian Ray Medical Technology Co. (06669.HK) | In line with the market | HKD 10.6 → HKD 10.8
Gensight Biopharma Inc. (02407.HK) | In line with the market | HKD 30 → HKD 15.6