[ET Net News Agency, 2 November 2017] Credit Suisse assumed coverage on Shandong Weigao
Group Medical (01066) with an "neutral" rating, and a target price of HK$6.3 (up from
HK$5.3).
The research house sees that Weigao will likely deliver a stable growth with its core
business and at the same time, expand into new areas through M&A. It delivered decent
results of 10.7% YoY growth of consumables - 14.4% YoY for Orthopedics and 18.4% YoY for
dialysis.
Credit Suisse believes that the company maintained an advantageous position in the
industry despite negative impact from two-invoice policies on medical device.
Weigao announced the acquisition of US Argon medical device at a price of 3.8x 2016 P/S.
Argon makes and sells medical devices for the use in interventional oncology and vascular
interventional procedures. Credit Suisse believes the deal is accretive to its earnings
and had synergies with Weigao's existing portfolio. (KL)