Street Calls of the Week
Investing.com - HSBC downgraded Hygeia Healthcare Holdings Co Ltd (HK:6078) from Buy to Hold and lowered its price target to HK$15.00 from HK$19.00 on Monday.
The downgrade follows Hygeia’s first-half 2025 results, which showed revenue and net profit declining 17% and 36% year-over-year respectively, missing both market and HSBC expectations. The underperformance was attributed to regulatory tightening, including DRG/DIP reforms and stricter medical insurance price controls affecting key hospital revenues.
Hygeia’s share price has already corrected 14% in the past month, compared to a 3% gain in the HSCEI Index during the same period. HSBC has reduced its 2025-27 net profit estimates by 26-31%, reflecting a more conservative outlook on growth prospects for Hygeia’s key hospitals and network expansion.
The stock currently trades at 15x/1.4x 2026 estimated PE/PEG, above the average PE/PEG of 11x/1.0x for its A/H healthcare service peers. HSBC considers the current valuation fair with short-term growth potential already priced in.
Despite the downgrade, HSBC still projects approximately 10% earnings per share CAGR for 2025-27, supported by solid oncology demand and the ramp-up of Phase II and new hospitals.
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