Hangzhou Tigermed Consulting - H: 4Q25 Revenue and Profit Slightly Below Pre-Announcement Median, 2026 Growth Expected
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UBS initiated coverage on Hangzhou Tigermed Consulting's H-shares (3347.HK) with a Buy rating and a slight target price reduction to HKD 56.70 from HKD 57.10. For 2025, total revenue grew 3.5% year-over-year to RMB 6.83 billion, falling short of the pre-announcement median range. Net profit attributable to shareholders surged 119.2% to RMB 890 million but similarly missed expectations. The gross margin contracted by 6.5 percentage points to 27.4%, primarily dragged down by a 9.5 percentage point decline in the clinical trial services segment. Fourth-quarter revenue showed strength, rising 17.7% to RMB 1.81 billion, though the quarter recorded a net loss of RMB 130 million.
Despite the near-term profitability challenges, Tigermed demonstrates strong forward momentum. The company's order backlog reached RMB 18.2 billion, representing 15.3% year-over-year growth, while newly signed orders surged 20.7% to RMB 10.2 billion. Management projects a robust recovery in 2026, guiding for double-digit revenue growth and recurring net profit of RMB 600-700 million, supported by stabilized pricing and volume recovery.
UBS trimmed its 2026-2028 gross margin forecasts by 2.5 to 3.2 percentage points, resulting in a 16-21% reduction in earnings per share estimates. However, the Buy rating is maintained given the accelerating demand recovery and the long-term growth runway. The anticipated influx of AI-discovered drug candidates entering clinical trials presents a substantial structural opportunity. The valuation implies 42x and 30x price-to-earnings multiples for 2026 and 2027.