CROSBY Research – Vincent Medical (1612 HK/Neutral): Weak respiratory sales and inventory pile-up dented bottom line

14 Feb 2023

Vincent Medical (VM) issued a profit warning citing that its FY22 reported net profit is expected to turn into a loss of HK$15.0m to HK$20.0 as compared to a net profit of HK$60.7m in FY21. The loss, however, has narrowed from a net loss of HK$44.4m in 1H22, due to the decrease in allowance for inventories as market demand for VM’s respiratory devices improved and better product price adjustment in 2H22. VM adjusted up its ASP in April this year, therefore the effect of price adjustment to compensate the rising costs were better reflected in 2H22.