Haitong International released a research report stating that HYGEIA HEALTH (06078), as one of the leading private healthcare service providers, possesses multiple high-quality hospital assets and long-term brand value. The firm maintains a target price of HKD 35.17 per share, corresponding to 32x/29x PE ratios based on adjusted net profit for 2025/2026, and reiterates its "Outperform" rating, recommending attention to the stock.
HYGEIA HEALTH's revenue has stabilized sequentially with a stable business structure. In H1 2025, the company achieved revenue of RMB 1.99 billion, with oncology business accounting for 44% of total revenue. As of the end of H1 2025, the company operates 16 hospitals with oncology as the core business and actively undertakes international medical demand. Currently, Chongqing Hygeia Hospital has provided international diagnostic and treatment services for cancer patients from Malaysia, Indonesia, and other regions.
The firm forecasts HYGEIA HEALTH's revenue for 2025/2026 to be RMB 4.49 billion/RMB 4.65 billion, representing year-on-year growth of 1.0%/3.7% (previously RMB 4.79 billion/RMB 5.15 billion, downward revision due to unclear marginal improvement in consumption and medical insurance cost control environment, with revenue growth below expectations). Adjusted net profit is expected to be RMB 610 million/RMB 690 million, with year-on-year growth of 6.1%/7.6% (previously RMB 700 million/RMB 750 million, downward revision for the same reasons).
The firm notes that the company's cash flow level has improved significantly while optimizing capital expenditure. As of H1 2025, the company's net operating cash flow was RMB 460 million (+29.9%), with capital expenditure of RMB 240 million (-28.5%). Free cash flow reached RMB 210 million (+1611.2%). Cash on hand totaled RMB 700 million (+6.8%), indicating abundant funds. The company expects to have passed the peak period of capital expenditure, with sufficient bed capacity reserves, reduced debt ratios, and significantly increased free cash flow.