CITIC International has lowered the target price and revenue growth forecast for XUNFEIHEALTH, with fluctuations observed in the B-end business

According to a report by China Merchants International, XUNFEIHEALTH (02506.HK) had mixed results in its interim performance. Revenue from the G-end business increased by 87% year-on-year to RMB 141 million, accounting for 30.4% of the bank's full-year forecast, exceeding the historical average of about 28%. Revenue from the B-end business fell by 10% year-on-year to RMB 53 million. Overall revenue increased by 30% year-on-year to RMB 299 million, with improved operating efficiency, a 7.5 percentage point reduction in the ratio of sales and general administrative expenses, and a 20.7 percentage point decrease in the proportion of R&D expenses. The net loss rate decreased by 15.5 percentage points year-on-year to 22%.

The bank believes that the medical artificial intelligence industry is still in its early stages, and demand fluctuations may affect the company's growth. However, it is believed that AI solutions covering G-end, B-end, and C-end demands bring diversification, partially offsetting fluctuations in individual business segments. Based on the challenges faced by the B-end business in the first half of the year, the bank has lowered its revenue compound annual growth rate forecast for the company from 2024 to 2026 by 10 percentage points to 27.9%. The target price has been reduced from RMB 166.69 to RMB 143.59, with a target price-to-sales ratio of 13 times for the 2026 forecast, maintaining a "Buy" rating