研究报告全文：MN6Jan2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateECHealthcare2138HKHK-Mainlandborderreopeningtorevivecross-bordermedicalconsumptionTargetPriceHK1102ECHealthcareECHreportedFY1H23revenueofHK1893mnupby31PreviousTPHK1034YoYinwhichrevenuefromaestheticmedicalandbeautyandwellnessUpDownside312collectivelyconsumermedicalsegmentdeclinedby2YoYcausedbystoreCurrentPriceHK840closuresinAprilandagradualrecoverythereafterinHKaswellasregulatoryheadwindsandCOVIDdisruptionsinMainlandHoweversalesvolumeChinaHealthcaregeneratedfromcontractedsalesshowedcontinuousrecoverybyquarterupJillWUCFAby2111QoQinFY1Q23FY2Q23followinga19QoQdeclineinFY4Q2285239000842duetoCOVIDlockdownsinHKAsHK-Mainlandborderreopeningwillbejillwucmbicomhkofficiallyresumedon8Jan2023weexpectECHwilldirectlybenefitBenchenHUANGCFATheHK-MainlandborderreopeningisexpectedtosupportFY24huangbenchencmbicomhkbusinessgrowthespeciallyforconsumermedicalservicesSincetheChinesegovernmentactivelyadjustedpandemiccontrolmeasuresinend-StockData2022thequarantine-freetravelbetweenHKandMainlandhasbeenwidelyMktCapHKmn99224anticipatedbythemarketOn5Jan2023theStateCouncilandHKAvg3mthstoHKmn57governmentannouncednewpoliciestoofficiallyallowborderreopeningfor52wHighLowHK1036398TotalIssuedSharesmn11812travellersstartingfrom8Jan2023link1link2WebelieveECHwillSourceFactSetsubstantiallybenefitfromHK-Mainlandborderreopeninggiventhat30-40ofECHstotalrevenuewerecontributedfromcross-bordertravellersbeforeShareholdingStructurethepandemicaccordingtoECHsmanagementAsHK-MainlandtravellingTangChiFai612willberesumedonagradualbasisrevenuefromcross-bordertravellersGoldmanSachs55SourceHKExwillalsobelargelygeneratedinFY24endedMar2024PreviouslyECHsconsumermedicalservicesweredisruptedbythestrictpandemiccontrolSharePerformancemeasuresadoptedinHKandMainlandandwethinkborderreopeningwillAbsoluteRelativehavemorepositiveimpactsonthispartofbusinessforECHWeforecast1-mth3642643-mth677441revenueofECHsconsumermedicalservicestogrowby1740256-mth89131YoYinFY23FY24FY25respectivelySourceFactSetEnhancingservicecapabilitiesduringthepandemictobettercapture12-mthPricePerformanceconsumptionrecoveryopportunitiesfromcross-bordertouristsDespitetheharshmacroenvironmentafterpandemicoutbreakECHhasbeenpersistentlyimplementingitsMAstrategytodiversifyitsserviceportfoliointhepastthreeyearsTotalMAexecutionvalueamountedtoHK641HK219mninFY22FY1H23NotableMAdealsincludeBayleyJacksonapremiumHK-baseddentalchainmultipleHK-basedveterinaryclinicsandasharesubscriptionofahospitalgrademedicalbuildinginTsimShaTsuiofHKComparedwithitspre-pandemicservicestructurecenteringSourceFactSetonconsumermedicalcategoriesaccountingfor71oftotalrevenueinFY19ECHhasnowofferedcustomerswithmoreoptionsinspecializedmedicalservicessuchasdentalmedicalimagingandveterinaryservicesTheenhancedservicescapabilitiesputECHinagoodpositiontomeetdiversifiedmedicaldemandforbothlocalandcross-bordercustomersMaintainBUYWeraisedourTPtoHK1102basedona10-yearDCFmodelWACC118terminalgrowth20toreflectcustomertrafficresumptionfromHK-mainlandborderreopeningEarningsSummaryYE31MarFY21AFY22AFY23EFY24EFY25ERevenueHKmn20802920388450366133YoYgrowth68403330297218NetprofitHKmn19291975260554328111YoYgrowth327243191085493EPSReportedHK019017022046069ConsensusEPSHKnana019032044PEx268634381183122Yield3314214161SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk6Jan2023Figure1EarningsrevisionNewOldDiffHKmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue388450366133384548746048103314GrossProfit338744725489334343145382133720OperatingProfit43683612134227911167345640Netprofit260543811259537798071216EPSHK022046069022045068071216GrossMargin872088808950869488508900026ppt030ppt050pptOperatingMargin112416591978109816231929026ppt036ppt049pptNetMargin6711079132367211011320-002ppt-022ppt002pptSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffHKmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue3884503661333782464255162785112GrossProfit33874472548933153787447622181226OperatingProfit4368361213462685919-55220320Netprofit260543811217359526199513541EPSHK022046069019032044167433547GrossMargin872088808950876481588114-044ppt722ppt836pptOperatingMargin112416591978122114761665-098ppt183ppt313pptNetMargin67110791323575773954096ppt305ppt369pptSourceCompanydataCMBIGMestimatesFigure3Valuationonrisk-adjustedDCFvaluationDCFValuationinHKmn2023E2024E2025E2026E2027E2028E2029E2030E2031E2032EEBIT44483612131346148116141743186519772076Taxrate151150150150150150150150150150EBIT1-taxrate37771010311144125913721482158616811765DA4715496326957578188759289741013-Changeinworkingcapital13485561667277818589-Capex850850950500500500500500500500FCFF1364016571278145016181780193220702189Terminalvalue22843Terminalgrowthrate20WACC118CostofEquity150CostofDebt50EquityBeta12RiskFreeRate30MarketRiskPremium100TargetDebttoAssetratio300EffectiveCorporateTaxRate150TerminalvalueHKmn7504TotalPVHKmn13743NetdebtHKmn196MinorityinterestHKmn531EquityvalueHKmn13016ofsharesmn1181PricepershareHKpershare1102SourceCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE26Jan2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31MarHKmnRevenue194920802920388450366133Costofgoodssold216235350497564644Grossprofit173318452570338744725489Operatingexpenses135415612199295136364276Sellingexpense124109139186212245Staffcosts83710291384195323672760Otherrentalrelatedexpenses43486180101123Others3503756147329571148Operatingprofit3782853714368361213ShareoflossesprofitsofassociatesJV051800NetInterestincomeexpense182449645649Pre-taxprofit3612663213807791164Incometax50405158117175Aftertaxprofit310226271323662989Minorityinterest24337362119178Netprofit287193198260543811Grossdividends227172170208407608BALANCESHEET2020A2021A2022A2023E2024E2025EYE31MarHKmnCurrentassets105214151516194920852298Cashequivalents520931870120712191324Accountreceivables79179155201233250Inventories6040101100113130Prepayment189191215266345420FinancialassetsatFVTPL11132222Othercurrentassets9371172172172172Non-currentassets150323763345368839234145PPE7257921193131414181496Intangibles115512692648582485Goodwill155477709709709709Othernon-currentassets507595751101712151455Totalassets255537904861563760096442Currentliabilities106913171363132514421495Short-termborrowings2622870000Accountpayables159215315277394447Othercurrentliabilities488607730730730730Leaseliabilities161207319319319319Non-currentliabilities3168421147184718471847Convertiblebonds0240236236236236Obligationsunderfinanceleases297295387387387387Othernon-currentliabilities20308524122412241224Totalliabilities138621602510317232893342Sharecapital000000Capitalsurplus100312691881193320692272Totalshareholdersequity100312691881193320692272Minorityinterest167362469531651829Totalequityandliabilities255537904861563760096442PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE36Jan2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31MarHKmnOperatingProfitbeforetaxation3612663213807791164Depreciationamortization246310432565665779Taxpaid65546758117175Changeinworkingcapital1480135134855Others211957565649Netcashfromoperations57662160881013761762InvestingCapitalexpenditure70136260550650750Acquisitionofsubsidiariesinvestments112353347300200200Netproceedsfromdisposalofshort-term4991080000investmentsOthers01236505050Netcashfrominvesting3163695719009001000FinancingDividendpaid352130322208407608Netborrowings145609070000Proceedsfromshareissues3107530000Others536429308645649Netcashfromfinancing739157100427464658NetchangeincashCashatthebeginningoftheyear36752093187012071219Exchangedifference022000Cashattheendoftheyear520931870120712191324GROWTH2020A2021A2022A2023E2024E2025EYE31MarRevenue5268403330297218Grossprofit6665393318320227Operatingprofit158248304176915452Netprofit206327243191085493PROFITABILITY2020A2021A2022A2023E2024E2025EYE31MarGrossprofitmargin889887880872888895Operatingmargin194137127112166198ReturnonequityROE280170125137271374GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31MarNetdebttoequityx020101010100Currentratiox101111151415Receivableturnoverdays172226209189169149Inventoryturnoverdays945769734734734734Payableturnoverdays487639636640640640VALUATION2020A2021A2022A2023E2024E2025EYE31MarPE189268634381183122PEdiluted189269646381183122PB544167514844PCFPS94832061237256Divyield423314214161SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE46Jan2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE5