CICC has released a research report adjusting its forecast for ORBUSNEICH (06929). Due to pressure in certain markets and increased expenses from sales network expansion, the firm has lowered its adjusted net profit forecast for 2026 by 16% to $41.08 million. It has also introduced an initial adjusted net profit forecast of $48 million for 2027. Based on these figures, the current share price implies a 2026/27 price-to-earnings ratio of 9/8 times. Consequently, CICC reduced its target price by 17% to HK$5.3, which corresponds to 2026/27 P/E ratios of 12/11 times and suggests a potential 39% upside from the current price.
The report's key points are as follows: The company's 2025 performance was largely in line with market expectations. ORBUSNEICH reported full-year 2025 revenue of $180 million, a year-on-year increase of 10.0%. Net profit attributable to shareholders was $41.9 million, up 5.5% year-on-year, primarily affected by a decline in interest income. Core net profit reached $34.83 million, representing a significant 20.2% year-on-year increase. Second-half 2025 revenue was $96.9 million, up 13.8% year-on-year, meeting market expectations.
Regional performance in 2025 showed strong growth in several areas: 1) Revenue in the Asia-Pacific region grew 15.7% year-on-year to $60.47 million, driven by increased third-party product sales in Indonesia and the acquisition of a distributor in Taiwan, China. 2) EMEA revenue increased by nearly 20% year-on-year to $46.89 million. 3) Despite tariff-related disruptions, revenue in the United States grew 37.0% year-on-year to $21.2 million, benefiting from expanded hospital coverage. 4) Revenue in Japan declined 6.2% year-on-year to $32.3 million, mainly due to sales strategy adjustments, although sales showed improvement in the fourth quarter following the launch of new products. 5) Revenue in China decreased by 13.9% year-on-year to $17.82 million, primarily impacted by volume-based procurement for coronary balloon products.
Overall profitability remained stable, with a noticeable marginal improvement in the second half. The full-year 2025 gross profit margin was 67.8%, down 2 percentage points year-on-year, mainly due to the impact of volume-based procurement in China. However, benefiting from an increased proportion of direct sales, the second-half gross margin recovered to 68.7%, an increase of 2 percentage points sequentially. The core operating profit margin improved to 20.4%, indicating that enhancements in product and regional mix began to show results in the latter part of the year.
The company is globalizing its commercial network and continuously introducing high-quality products, while also optimizing its dividend policy. ORBUSNEICH has now expanded its direct sales presence to 12 markets, with direct sales accounting for 58% of total revenue in 2025. This proportion is expected to continue rising. The global commercial network is considered a distinctive strength. Looking ahead to 2026, it is anticipated that the company will submit its clinical plan for a coronary drug-coated balloon to the PMDA for review and file an application for a peripheral scoring balloon. Furthermore, the structural heart product TricValve has received FDA approval for an Investigational Device Exemption clinical study, and the first commercial implant in the Greater Bay Area has been completed. The company's dividend payout ratio for 2025 reached 68%, further enhancing returns for shareholders.
Potential risks highlighted include the impact of geopolitics, greater-than-expected price reductions from volume-based procurement, and slower-than-anticipated commercialization of new products.