Cofoe Medical has reported 9M26 revenue/attributable net profit(NP)/recurring attributable NP of RMB3,191/305/270mn(+33.1/+17.3/+21.4%YoY).The 3Q26 figures were RMB1,119/103/97mn(+24.1/+10.9/+13.0%YoY).Volume scaling in core categories drove rapid revenue growth in 9M26.We expect sustained volume expansion in self-developed ventilators,combined with incremental contributions from CGM and Philips co-branded products,to propel continued rapid earnings growth.Maintain BUY.
Core category upgrades;new products to drive ongoing growth
1)Respiratory support:Upgraded the C10 and launched the C11 AI ventilator during the year,steadily enhancing differentiated product competitiveness.Considering continued product matrix refinement and expanding online promotion/offline terminal coverage,we expect ventilators to sustain rapid volume scaling.
2)Rehabilitation aids:Continued iterations of Babaka and bone conduction hearing aids have expanded target demographics and usage scenarios.We expect product upgrades and operational improvements at JOYOR HearingCare to support steady segment growth.
3)Health monitoring:With the gradual market introduction of CGM and Philips co-branded products,we expect new product cultivation to contribute incremental growth.
4)Medical care:The company is expanding into high-value-added categories such as high-end functional dressings and ostomy care while leveraging Shanghai Huazhou’s manufacturing resources to refine supply.We expect new product rollout and production synergies to drive revenue and profit growth.
5)TCM physiotherapy:Physiotherapy devices sustained volume scaling driven by product innovation and online promotion;we expect growing user awareness and scenario expansion to maintain good growth momentum.
Channel operations optimize;overseas expansion accelerates
1)Online channels:The company has optimized platform operations and marketing spend around core hero SKUs,consolidating traditional e-commerce share while expanding in content e-commerce;we expect enhanced promotion and conversion efficiency to support continued rapid online growth.2)Offline channels:JOYOR HearingCare have focused on store operation quality,steadily improving service levels and single-store performance;we expect steady offline growth and further margin expansion.3)Overseas business:Overseas channel expansion alongside resource synergies with Shanghai Huazhou and Humana continue advancing,which could drive ongoing overseas scale expansion.
Product mix optimizes;gross margin increases steadily
For 9M26/3Q26,the gross margins were 56.2/56.9%(+2.9/+2.1pp YoY),mainly driven by ahigher proportion of high-margin products and deeper in-house R&D/manufacturing integration.For 9M26,the sales/administrative/R&D expense ratios were 37.63/4.25/2.50%(+3.60/-0.89/-0.04pp YoY).The sales expense ratio increased as the company stepped up online promotion around core SKUs,while the administrative expense ratio declined due to economies of scale.As high-margin products scale up and channel investment conversion efficiency improves,we expect ongoing quality enhancements in profitability.
Earnings forecasts and valuation
We maintain our 2026/2027/2028 revenue forecasts at RMB4,320/5,335/6,460mn.Factoring in increased marketing efforts for core products,we raise our sales expense ratio forecasts,lowering our attributable NP forecasts by 5/4/4%to RMB441/555/686mn.Considering the growth potential across respiratory support,JOYOR HearingCare,overseas expansion,and the Philips partnership,we value the A-/H-shares at 30/17x 2027E PE vs.their peers’averages of 27/12x on iFinD consensus,for our target prices of RMB70.53/HKD46.47(previous:RMB68.74/HKD45.68 on 35/20x 2026E PE).
Risks:intensified competition;slower new product commercialization than we expect;platform dependency risks.