UBS has issued a new price target for Shanghai MicroPort MedBot Group (2252:HK), reducing it to HK$9.50 from the previous HK$20.00, while still recommending the stock as a Buy.
The adjustment follows the company's H124 financial report, which showed a significant 108.5% year-over-year increase in revenue to Rmb99.2 million. Additionally, the firm's net losses decreased by 49% year-over-year to Rmb280 million.
The company's domestic revenue saw a 65% year-over-year increase, but UBS anticipates potential challenges ahead. Concerns include the ongoing effects of an anti-corruption campaign slowing down the bidding process and the deferment of tenders due to uncertainties regarding equipment renewal programs. These factors may affect the company's new order flow in China in the second half of 2024.
Despite these domestic market challenges, UBS notes that Shanghai MicroPort MedBot Group has maintained a leading position in the domestic market. However, there are lingering uncertainties that could continue to affect its performance.
Additionally, the company may face increased competition in the future from other domestic companies and localized multinational corporation products.
On a positive note, the company's international revenue demonstrated robust growth in the first half of 2024, surging by 293% year-over-year. The success was particularly evident in sales across both developed markets and countries involved in the Belt and Road Initiative (BRI), indicating promising potential for further expansion abroad.
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