Guotai Haitong Securities released a research report maintaining an "Overweight" rating on WEIGAO GROUP (01066) with a target price of HK$7.84. WEIGAO Blood Purification plans to issue shares to acquire 100% equity of WEIGAO Purui. Through this integration, WEIGAO GROUP will become the controlling shareholder of WEIGAO Blood Purification, further clarifying its position as the flagship medical device platform under the Group. The two parties are expected to achieve synergies in the upstream biopharmaceutical field, seize opportunities from domestic substitution, and expand growth space. The transaction is expected to be completed in the mid-to-late period of 2026. The main views of Guotai Haitong Securities are as follows.
On October 17, 2025, WEIGAO Blood Purification announced its plan to issue shares to acquire 100% equity of WEIGAO Purui. Prior to the transaction, WEIGAO GROUP held 23.53% of WEIGAO Blood Purification and 94.07% of WEIGAO Purui. On January 5, 2026, the two companies announced the final transaction plan. The assessed value of 100% equity of WEIGAO Purui is 8.511 billion yuan. Based on an issue price of 31.29 yuan per share, WEIGAO Blood Purification plans to issue 272 million shares, accounting for 39.43% of the total share capital post-issuance. The net profit attributable to owners of WEIGAO Purui for 2023, 2024, and the first nine months of 2025 was 483 million yuan, 581 million yuan, and 486 million yuan, respectively. The committed net profits for 2026, 2027, and 2028 are 640 million yuan, 720 million yuan, and 784 million yuan, respectively. Based on the total assessed value of 8.511 billion yuan and the 2024 net profit of 581 million yuan, the corresponding P/E ratio is 14.6x. According to the company's investor presentation materials, WEIGAO GROUP and WEIGAO Blood Purification are expected to hold extraordinary general meetings for voting in February 2026. Assuming subsequent review processes proceed smoothly, the transaction is projected to be completed in Q2-Q3 2026.
The upstream biopharmaceutical market is vast, and Purui and Blood Purification are expected to leverage synergies. According to the company's investor presentation materials, since the second half of 2024, with the rapid development of innovative drugs and active BD transactions, demand in the upstream biopharmaceutical sector has recovered quickly. The market size in China was 21.2 billion yuan in 2024, with a projected compound annual growth rate of 11.5% from 2024 to 2030E. In terms of the competitive landscape, the overall localization rate remains relatively low, presenting significant opportunities for domestic substitution. Currently, WEIGAO Blood Purification has established a product line for upstream filtration in biopharmaceuticals, while WEIGAO Purui possesses extensive customer resources in the biopharmaceutical field. Post-transaction, the two parties are expected to further leverage synergies, fully capitalize on opportunities in the upstream biopharmaceutical market, and expand future growth space.
The company's positioning as a flagship medical device platform is further clarified. Post-transaction, the company will hold a 52.10% stake in WEIGAO Blood Purification, becoming its controlling shareholder and consolidating its financial statements. This transaction will further integrate and optimize the core medical assets under the WEIGAO brand, solidifying the company's role as the flagship medical device platform within the WEIGAO Group.
Risk warnings include potential underperformance in new business expansion and the risk of failure to meet performance commitments.
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