CROSBY Research – Vincent Medical (1612 HK/BUY): Turnaround in FY23

02 Feb 2024

Vincent Medical (VM) issued a positive profit alert citing that based on the preliminary assessment, the company’s FY23 NP is expected to be not less than HK$52.0m, compared to a loss of HK$17.4m in FY22. The turnaround was mainly due to: 1) strengthening relationships and expanding business scale with the major customer, resulting in a strong increase in revenue and gross profit generated from the imaging disposable products segment; 2) GPM improvement on decrease in allowance for inventories from HK$34.9m in FY22 to not more than HK$7.0m in FY23 and 3) overall GPM enhancement on increase in capacity utilization rate and operating efficiency and the depreciation of Rmb.