Shandong Weigao Group Macro: QQ4 2024 revenue totaled 3,225,691,500 CNY with an improving profitability profile and a robust balance sheet. The company posted a gross margin of 48.97% and an operating margin of 15.65%, driven by a solid cost of revenue structure and stable pricing in core product lines. Net income for the quarter was 479,559,500 CNY, up 19.27% year over year, translating to an earnings per share (EPS) of 0.10 CNY on a diluted basis.
Profitability and efficiency: The quarter delivered an EBITDA of 722,256,000 CNY and an EBITDAR of 0.2239, with operating income of 504,910,500 CNY, reflecting a YoY operating income increase of ~52%. Revenue grew modestly by 1.89% YoY and 0.00% QoQ, underscoring sustained demand in China’s hospital networks and medical centers. Net cash position remained strong, with cash and short-term investments totaling 8,321,808,000 CNY and a net debt of -3,587,164,000 CNY, signaling ample liquidity to fund capex or shareholder returns.
Capital allocation and balance sheet health: The company maintains a very healthy liquidity profile (current ratio 3.20, quick ratio 2.78, cash ratio 1.28) and a high dividend payout policy (payout ratio 92.2%, dividend yield 2.19%). Despite this strength, working capital metrics indicate a lengthy operating cycle (DSO ~208 days, DIO ~138 days, CCC ~346 days), implying continued emphasis on working capital optimization. Overall, the balance sheet remains solid with total assets of 34.76b CNY and total stockholders’ equity of 23.75b CNY.
Investment view: Weigao’s QQ4 2024 results reflect a mature, cash-generative business with generous shareholder returns and a conservative balance sheet. The valuation metrics (P/E ~10.5x, P/B ~0.85x, P/S ~6.25x) align with healthcare devices peers given steady domestic demand and a strong liquidity cushion. Investors should watch for catalysts from operating efficiency improvements, product mix enhancements, and potential expansion into export markets or new therapeutic device categories.