M Stanley issued a research report stating that it raised revenue forecasts for WEIGAO GROUP (01066.HK) -0.040 (-1.136%) Short selling $23.46M; Ratio 36.002% for 2026 to 2028 by 4% each year, reflecting annual growth of about 4% to 5%, at the lower end of managements latest guidance. However, the broker lowered its gross margin assumptions for 2026 to 2030 to reflect ongoing pricing pressure and the impact of volume-based procurement on general consumables, and fine-tuned operating expense ratios in line with trends.The broker has incorporated WEIGAO GROUPs full-year 2025 results and cut its EPS forecasts for 2026 to 2028 by 14.7%, 13.8% and 14.2%, respectively. Based on an updated RMB to HKD exchange rate of 1.14, it reduced the TP from HKD6 to HKD5.2 and maintained an Equalweight rating.The broker noted that WEIGAO GROUP has diversified exposure across multiple medical technology segments in China, including general consumables, orthopedics, pharmaceutical packaging, interventional products and blood management. It operates one of the most efficient sales and distribution networks in the industry, providing a strong platform for launching new products. However, recent growth has been affected by price cuts and below-average industry sales volume, alongside ongoing headwinds from DRG and volume-based procurement policies. The Equalweight rating reflects reasonable valuation supported by a stable growth trajectory and dividend yield.
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