$CR MEDICAL (01515.HK)$ China Resources Medical Holdings Com...

China Resources Medical Holdings Company Limited, formerly China Resources Phoenix Healthcare Holdings Co., Ltd, is an investment holding company mainly engaged in the group purchasing organization (GPO) business. Along with subsidiaries, the Company operates its business through four segments. The GPO Business segment is involved in the sales of pharmaceuticals, medical devices and medical consumables to Jian Gong Hospital, the Internet of things (IOT) Hospitals and external customers. The General Healthcare Services segment provides hospital services provided through Jian Gong Hospital and 999 Medical Clinic (Shenzhen) Co., Ltd. The Hospital Management and Consulting Services segment provides comprehensive management and consulting services to IOT Hospitals and sponsored hospitals and receives an annual fee. The Other Hospital-Derived Services segment provides medical consultation service to third parties.

The Chinese New Year travel rush will kick start in one month. This will be the first rush after China lifted COVID restrictions. The peak of this wave of infections has yet come. As the death rate of Omicron is around 0.3% to 0.4%, hundreds of thousands of patients are expected to be hospitalised in the next couple of months. Accordingly, the healthcare system will be under pressure, and the demand for related medical treatment and beds will jump.

1H22 revenue jumped by 60.9% YoY to RMB2.9b in 1H22. Profit attributable to the parent rose by 1.1% YoY to RMB201.6m.

The updated market consensus of the EPS growth in FY22/23/24 is -0.07%/13.9%/2.2% YoY respectively, translating to 15.1×/13.2x/12.9x forward PE. The current PER is 15.6x. Bloomberg consensus average 12-month target price is HKD7.27.