Key Takeaways
BofA Securities cut its price target for Haigia Medical (06078.HK) to HKD 16 from HKD 17.5, citing the company’s weaker-than-expected 2025 financial results, but reiterated its Buy rating.
The bank’s report pointed to a strong recovery in free cash flow and the “long-term resilience of demand for oncology treatment” as the basis for its continued positive outlook on the healthcare provider.
Haigia’s total revenue for 2025 decreased 9.8% year-over-year to RMB 4 billion, while net profit plunged 73% to RMB 162 million. The profit decline was primarily driven by a RMB 283 million goodwill impairment related to the Etern Group. On an adjusted basis, net profit fell 24.4% to RMB 456 million. Despite the earnings drop, the company’s free cash flow surged 407% year-over-year to RMB 466 million.
Following the results, BofA lowered its revenue forecasts for Haigia for 2026 to 2028 by 5-9% and cut its adjusted earnings per share estimates by 19-23% for the same period.
The target price reduction reflects the significant earnings forecast adjustments. However, the reiterated Buy rating suggests BofA believes the market has overly punished the stock for the one-off impairment, focusing instead on the strong cash generation and the completion of major hospital construction expected in 2026.
This article is for informational purposes only and does not constitute investment advice.
