Kingmed (603882.SS): Earnings review: 3Q26 revenue miss while NP beat; TP down to Rmb35; Buy

3Q26 revenue remained under pressure while business mix and profitability continued to improve. Kingmed reported 3Q26 revenue that missed GSe and declined YoY, with the decline attributable to lower testing prices, weak demand for routine testing at lower-tier hospitals and the company's proactive exit from low-margin businesses; revenue per sample continued to decline despite sample volume growth. A high base from one-off COVID-related revenue in 3Q25 also weighed on reported growth. Business mix kept improving on strong momentum in high-value testing and laboratory collaboration projects, with key esoteric testing products and affordable testing growing strongly, and Tier-3 hospitals accounting for a larger share of revenue. 3Q26 net profit beat GSe and rebounded sharply YoY, while gross margin expanded, supported by cost optimization, favorable mix shift and the reversal of previous AR impairments. On outlook, management estimates a roughly 5% reduction in overall testing prices und