J.P. Morgan Maintains Concord Rating; PT Rolled Over To Dec-11

Concord Medical Services CCM released its 3Q10 results on Nov. 18th with sales of Rmb101mn (US$15mn), 5% lower than our estimate, and net profit of Rmb33mn (US$5mn), 2% below our estimate, due to depreciation and amortization from business expansion in 3Q10,” J.P. Morgan reports. “Management maintained its FY10E sales guidance range of Rmb367mn to Rmb398mn,” J.P. Morgan writes. “We maintain OW and roll over our price target, which is maintained at US$8.40, from Dec-10 to Dec-11.” J.P. Morgan said the key downside risks to its price target and investment thesis include regulatory measures that squeeze pricing of healthcare services and lower acquisition pace of new hospital contracts. Concord currently trades at $7.07.