Investment Rating - The report maintains a "Positive" investment rating for the healthcare equipment industry [10]. Core Insights - The first round of national procurement for artificial joints has ended, leading to a moderate drop in prices and a stabilization in the initial replacement market. The average price for selected hip joint products decreased from 35,000 yuan to 7,000 yuan, and knee joint products from 32,000 yuan to 5,000 yuan, reflecting an average price drop of 82% [7][53]. - The lifespan of artificial joints is estimated to be 15-20 years, creating a rigid clinical demand for revision surgeries due to aseptic loosening, which is the most common cause for revisions [8][25]. - The peak period for revision surgeries in China is expected to begin in 2027, driven by increased penetration of initial replacement surgeries and the release of revision demand, indicating a rapid growth phase for the domestic joint replacement market [4][47]. Summary by Sections Market Overview - The domestic joint replacement market is experiencing rapid growth, with the number of orthopedic hospitals increasing from 603 in 2016 to 662 in 2021, and the number of practicing orthopedic doctors rising from 10,316 to 15,535 during the same period, reflecting a compound annual growth rate of 8.53% [9][45]. - In 2019, approximately 952,000 joint replacement surgeries were performed in China, with a penetration rate of about 0.44%, compared to 2.15% in the United States [9][46]. Revision Demand - The report estimates that by 2025, the number of joint replacement surgeries will reach approximately 1.1 million, with a market size of 9.3 billion yuan, and by 2031, it will grow to about 3.3 million surgeries and a market size of 27.5 billion yuan, with revision surgeries accounting for 34% of the revenue [47]. Technological Advancements - The application of 3D printing technology in joint replacement is expected to enhance surgical precision and allow for personalized prosthetics, improving clinical outcomes [41][44]. Competitive Landscape - The report highlights that domestic leading manufacturers have significantly increased their market share post-procurement, with companies like Aikang Medical increasing their market share from 9.2% in 2019 to 15.0% in 2024 [7][53].

Investment Rating - The investment rating for the company is "Buy" with a target price of 8.15 HKD [8][9]. Core Views - The company achieved a revenue of 1.346 billion RMB in 2024, representing a 23% year-over-year increase, and a net profit of 274 million RMB, which is a 50% year-over-year increase, aligning with previous profit forecasts [1]. - The growth in profit is attributed to the execution of joint replacement contracts, with a 25.8% year-over-year increase in joint business revenue, and continuous optimization of sales, management, and R&D expense ratios [1]. - For 2025, the company is expected to enter a new cycle of simultaneous volume and price increases, with a projected net profit growth rate of 23% [1]. Summary by Sections Joint Business Segment - The joint segment generated revenue of 1.134 billion RMB in 2024, up 25.8% year-over-year, primarily due to successful contract renewals and price increases for certain products [2]. - The impact of contract renewals is expected to be more pronounced in 2025, with price increases exceeding 15% for full ceramic and knee joints, and a recovery in surgical volumes anticipated [2]. Spine and Trauma Segment - The spine and trauma segment achieved revenue of 127 million RMB in 2024, a 3% year-over-year increase, with expectations for steady growth in 2025 driven by the gradual increase in volume during the contract renewal period [3]. Customization Platform - The customization platform generated revenue of 51 million RMB in 2024, a 3.5% year-over-year increase, with expectations for stable growth in 2025 due to advancements in smart devices and ongoing overseas market expansion [4]. Profit Forecast and Valuation - The company is projected to have EPS of 0.30 RMB in 2025, with a target price set at 8.15 HKD based on a 25x PE ratio for 2025 [5]. - The expected revenues for 2025 are 1.639 billion RMB, with a net profit of 338 million RMB, reflecting a 23.3% increase from 2024 [7].

Core Viewpoint - Goldman Sachs maintains a "Buy" rating for Aikang Medical (01789) while slightly lowering the EPS forecasts for 2025-2026 by 2.7% and 3.1% respectively, reflecting a conservative outlook on gross margin improvement post-volume-based procurement (VBP) and introducing forecasts for 2027 [1] Financial Performance - The company reported revenue of 689 million RMB, a year-on-year increase of 54.8%, and a net profit of 135 million RMB, up 172% year-on-year, with a net profit margin of 19.5% [2] - Operating cash flow significantly improved from 344 million RMB in FY2023 to 450 million RMB in FY2024, attributed to reduced inventory days and procurement volume [2] Market Position - Aikang currently holds a 20% market share in the domestic market and is focusing on increasing its presence in top-tier hospitals, with market share in the top 10 hospitals rising from 8% in 2021 to 19% in 2024 [3] International Expansion - Overseas revenue grew by 21% year-on-year, with a 38% increase when including collaborative sales, as the company expands into emerging markets [4] - The company aims to increase the proportion of overseas revenue from 20% in FY2024 to 30% over the next five years [4] Digital Transformation - Aikang's second-generation knee joint robotic system is expected to receive approval from the National Medical Products Administration (NMPA) in 2025, with anticipated revenue from integrated solutions reaching 100 million RMB within three years [5]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside of 15% to 35% [5][11]. Core Insights - The company achieved a revenue of RMB 1.35 billion in 2024, representing a year-over-year (YOY) increase of 23.1%, and a net profit of RMB 270 million, with a YOY growth of 50.4% [8]. - The company is expected to continue its rapid growth in the first half of 2025, with projected net profits of RMB 350 million, reflecting a YOY increase of 28.8% [8][10]. - The company has seen significant recovery in revenue from hip and knee joint replacement products following the renewal of centralized procurement contracts, with hip joint revenue growing by 23.5% and knee joint revenue by 30.1% [8]. Summary by Sections Company Overview - The company operates in the pharmaceutical and biotechnology industry, with a current H-share price of HKD 5.62 and a target price of HKD 7.3 [2][5]. Financial Performance - The company reported a comprehensive gross margin of 60.0% for 2024, with a net profit margin of 20.3%, an increase of 3.7 percentage points YOY [8]. - The earnings per share (EPS) for 2025 is projected to be RMB 0.31, with a corresponding price-to-earnings (P/E) ratio of 17x [10]. Revenue Breakdown - The revenue composition includes 55% from hip joint implants, 30% from knee joint implants, 10% from spinal and trauma implants, and 4% from customized products and services [3]. Future Projections - The company is expected to achieve net profits of RMB 440 million and RMB 526 million in 2026 and 2027, respectively, with growth rates of 24.9% and 19.4% [10].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [5][11]. Core Insights - The company is expected to achieve a net profit of RMB 2.7 billion in 2024, reflecting a year-over-year increase of 50.4%, which aligns with market expectations [6][8]. - Revenue for 2024 is projected to be RMB 13.5 billion, representing a year-over-year growth of 23.1% [8]. - The company anticipates significant revenue growth in the second half of 2024, with expected revenue of RMB 6.9 billion, a year-over-year increase of 54.8% [8]. - The company plans to distribute a dividend of HKD 0.072 per share [8]. Summary by Sections Company Overview - The company operates in the pharmaceutical and biotechnology sector, with a current H-share price of HKD 5.62 and a target price of HKD 7.3 [2][5]. Financial Performance - The company reported a comprehensive gross margin of 60.0% for 2024, with a net profit margin of 20.3%, an increase of 3.7 percentage points year-over-year [8]. - The revenue breakdown shows that hip joint replacement implants account for 55% of total revenue, knee joint replacement implants for 30%, spinal and trauma implants for 10%, and custom products and services for 4% [3][8]. Earnings Forecast - The company is projected to achieve net profits of RMB 3.5 billion, RMB 4.4 billion, and RMB 5.3 billion for the years 2025, 2026, and 2027, respectively, with year-over-year growth rates of 28.8%, 24.9%, and 19.4% [8][10]. - The earnings per share (EPS) are expected to be RMB 0.31, RMB 0.39, and RMB 0.47 for the same years [10]. Market Position - The company has a market share of approximately 20% in the joint replacement market and has seen an increase in contributions from tier 1 hospitals [8].

Financial Performance - For the fiscal year ending December 31, 2024, the company reported a revenue of approximately RMB 1,346.4 million, representing a significant increase of 23.1% compared to RMB 1,093.9 million in 2023[4] - The gross profit for the same period was RMB 808.2 million, up 19.8% from RMB 674.5 million in the previous year[4] - Net profit for the year reached RMB 273.9 million, marking a substantial growth of 50.4% from RMB 182.1 million in 2023[4] - Basic earnings per share increased to RMB 0.25 from RMB 0.16, while diluted earnings per share rose to RMB 0.24 from RMB 0.16[6] - The company reported a total comprehensive income of RMB 282.6 million for the year, compared to RMB 195.6 million in 2023[6] - The company's profit before tax for 2024 reached RMB 319,822,000, an increase of 38.3% compared to RMB 231,117,000 in 2023[33] - The basic earnings per share for 2024 were RMB 0.245, up from RMB 0.164 in 2023, representing a growth of 49.4%[32] - The proposed final dividend per share for 2024 is HKD 0.072, compared to HKD 0.045 in 2023, indicating a 60% increase[36] Revenue Breakdown - Revenue from hip joint replacement implants was RMB 729,084,000, up 23.5% from RMB 590,396,000 in 2023[16] - Revenue from knee joint replacement implants increased by 30.1% to RMB 405,110,000 from RMB 311,351,000 in 2023[16] - The revenue from hip and knee joint products reached approximately RMB 1,134.2 million, representing a year-on-year increase of 25.8% as of December 31, 2024[52] - The revenue from spinal and trauma implant products was approximately RMB 127.3 million, with a year-on-year growth of 3.3% as of December 31, 2024[53] - The overseas business achieved revenue of RMB 274.3 million, marking an increase of approximately 20.8% compared to 2023[56] Research and Development - Research and development expenses for the year were RMB 139.2 million, slightly up from RMB 137.1 million in 2023[6] - The company’s research and development expenses were eligible for a 100% additional tax deduction under Chinese tax laws, maintaining the same rate as in 2023[33] - The company has continued to focus on expanding its product offerings, including digital orthopedic custom products and services, which generated RMB 51,335,000 in revenue[16] - The company has developed a deep learning-based 3D registration algorithm for CT/MRI/X-ray, enhancing the precision of anatomical structure reconstruction[58] Market Expansion and Strategy - The company achieved a significant increase in overseas revenue driven by the growth in surgical volume and active market expansion[4] - The company has diversified its customer base, with no single customer accounting for over 10% of total revenue in 2024[16] - The company secured a leading position in the second round of centralized procurement for artificial joints, with a procurement quantity increase of approximately 10% compared to the first round[45] - The company has achieved over 90% coverage of high-level hospitals, which is expected to support the growth of its revision products in the future[46] - The company is actively expanding its international market presence through the "Silk Road Health International Exchange Project," hosting 10 events across three continents and seven countries, reaching over 260 participants[63] Operational Efficiency - The company has implemented effective cost control measures, resulting in a reduction in operating costs and administrative expenses while maintaining R&D investments[46] - Employee costs for 2024 totaled RMB 254,945,000, slightly down from RMB 254,964,000 in 2023, with salaries and wages accounting for RMB 225,283,000[27] - Inventory costs increased significantly to RMB 551,556,000 in 2024 from RMB 435,315,000 in 2023, reflecting a rise of 26.7%[28] - Sales and distribution expenses increased by approximately 10.1% to RMB 240.9 million from RMB 218.8 million in 2023, driven by increased marketing activities[83] Assets and Liabilities - The total assets less current liabilities amounted to RMB 2,738.98 million, compared to RMB 2,504.85 million in the previous year[8] - Non-current assets increased to RMB 1,157.3 million from RMB 1,028.2 million in 2023, primarily due to investments in property, plant, and equipment[7] - Trade receivables as of December 31, 2024, amounted to RMB 561,392,000, an increase from RMB 496,393,000 in 2023, reflecting a growth of 13.1%[39] - The company reported a credit loss provision of RMB 66,572,000 for trade receivables in 2024, up from RMB 44,992,000 in 2023[39] - As of December 31, 2024, the company's cash and cash equivalents amounted to approximately RMB 352.2 million, with total liquid assets reaching approximately RMB 1,027.7 million, an increase from RMB 757.3 million as of December 31, 2023[88] Future Outlook - The smart factory project in Changping, Beijing, is expected to be operational by the first half of 2025, aimed at enhancing digital transformation and operational efficiency[64] - The company plans to leverage its dual-brand strategy to capture growth opportunities in international markets, particularly in emerging countries[67] - The focus on digital orthopedic capabilities and innovative business models is expected to enhance the company's competitive advantage in the long term[66] Corporate Governance - The company has not applied any new accounting standards that have not yet come into effect during the reporting period[14] - The company did not engage in any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the year ended December 31, 2024[99] - There were no significant events affecting the company after the fiscal year ended December 31, 2024[100] - The annual general meeting is scheduled for June 18, 2025, with a suspension of share transfer registration from June 13 to June 18, 2025, to determine eligible shareholders for voting[112]

Investment Rating - The report initiates coverage on Aikang Medical (1789 HK) with a "Buy" rating and a target price of HKD 6 8 [1][2] Core Views - Aikang Medical is positioned as a leading domestic orthopedic joint company with strong performance in the national joint procurement program The company is expected to see accelerated revenue growth in 2025 as the impact of industry anti-corruption measures subsides and joint procurement risks are cleared [1] - The company is a pioneer in applying metal 3D printing to orthopedic implants and is leveraging technologies such as 3D printing ICOS and surgical robots to build a digital orthopedic platform which will help expand its presence in the mid-to-high-end market [1] - The orthopedic industry is under short-term pressure due to anti-corruption measures but will benefit in the long term from a large patient base increasing surgical penetration rates and domestic substitution [1] - Aikang Medical's core products have cleared procurement risks and the company is expected to see improved earnings visibility in 2025 with revenue growth potentially accelerating on a lower base in 2024 [1] Financial Projections - Revenue is projected to grow at a CAGR of 22% from 2023 to 2026E with 2024E and 2025E revenue expected to reach RMB 1 305 million and RMB 1 625 million respectively [3] - Net profit attributable to shareholders is forecasted to grow at a CAGR of 22 9% from 2023 to 2026E with 2024E and 2025E net profit expected to reach RMB 261 million and RMB 324 million respectively [3] - The company's PE ratio is expected to decline from 30 8x in 2023 to 17 5x in 2025E reflecting improved earnings growth [3] Industry Overview - The orthopedic industry continues to face short-term pressure from anti-corruption measures but is expected to recover in 2025 with revenue growth driven by a large patient base increasing surgical penetration rates and domestic substitution [16] - The industry saw a 3% YoY increase in revenue and a 1% YoY increase in net profit in 9M24 with signs of recovery in 1Q/2Q/3Q24 showing revenue growth of -9% +3% and +17% respectively [1] - Domestic substitution is expected to accelerate as foreign brands focus more on top-tier hospitals and reduce overall investment in China [1] Company-Specific Analysis - Aikang Medical's hip and knee joint products which contributed 85% of revenue in 1H24 performed well in the national joint procurement program with most products achieving price increases in the procurement [1] - The company is a leader in 3D printing technology for orthopedic implants and has developed the ICOS platform which offers customized solutions for patients and surgeons [2] - Aikang Medical has a dual-brand strategy in overseas markets with Aikang and JRI which provides a full product line advantage and potential for scale making international markets a key growth driver [2] Valuation and Target Price - The target price of HKD 6 8 is based on a 22x 2025E PE multiple in line with the company's historical average over the past three years [2] - The target price implies a 27% upside from the current price of HKD 5 4 [4]

Investment Rating - The report initiates coverage on Aikang Medical (1789.HK) with a "Buy" rating and a target price of HKD 6.8, indicating a potential upside of 27% from the current price of HKD 5.4 [4][5]. Core Views - Aikang Medical, as a leading domestic orthopedic joint company, continues to demonstrate strong bidding performance in the ongoing national procurement of joint products, despite short-term industry disruptions due to anti-corruption measures. The company is expected to see improved visibility in revenue growth in 2025 as these risks clear [1][2]. - The long-term growth potential is supported by Aikang's focus on technological research and development, being the first in China to apply metal 3D printing in orthopedic implants. The company aims to leverage 3D printing, ICOS, and surgical robots to create a digital orthopedic platform, expanding its presence in the mid-to-high-end market [2][3]. Financial Forecasts and Valuation - Revenue is projected to grow from RMB 1,052 million in 2022 to RMB 1,990 million by 2026, with a compound annual growth rate (CAGR) of 22% from 2023 to 2026. The expected revenue growth rates for the years 2024, 2025, and 2026 are 19.3%, 24.5%, and 22.5%, respectively [3][14][97]. - The net profit is forecasted to increase from RMB 205 million in 2022 to RMB 399 million by 2026, with significant growth anticipated in 2025 [3][14][97]. - The report assigns a target price based on a price-to-earnings (PE) ratio of 22x for 2025E, aligning with the company's historical average [2][97]. Industry Overview - The orthopedic industry is currently facing short-term pressures due to anti-corruption measures, but it is expected to benefit in the long term from a large patient base, increasing surgical penetration rates, and domestic product substitution [1][16]. - The national procurement of orthopedic consumables has largely been implemented, with joint products being the first to undergo this process. The average price drop in the recent procurement round was around 6%, indicating a moderate impact on pricing [24][57]. - The domestic orthopedic implant market's localization rate is approximately 50%, with significant room for improvement as domestic brands gain market share through national procurement initiatives [27][29]. Product Development and Innovation - Aikang Medical has a comprehensive product layout in the joint category, having launched various generations of knee and hip joint replacement products since 2004. The company has also expanded its product line through strategic acquisitions, enhancing its technological capabilities and market reach [52][53]. - The introduction of the ICOS platform allows for customized orthopedic solutions, which is expected to drive sales in the mid-to-high-end market segment [62][64]. International Expansion - Aikang Medical employs a dual-brand strategy with Aikang and JRI in overseas markets, focusing on cost-effectiveness and stable product quality. The company aims to increase its overseas revenue contribution from 19% in 1H24 to over 30% in the medium to long term [93][94].

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of approximately RMB 657.1 million, an increase of 1.3% compared to RMB 648.7 million in the same period of 2023[6]. - The company's profit for the same period was approximately RMB 139.3 million, reflecting a growth of 5.0% from RMB 132.6 million in the previous year[6]. - The gross profit margin slightly decreased to RMB 398.5 million, down 0.8% from RMB 401.6 million in the prior year[6]. - The company achieved a sales revenue of approximately RMB 657.1 million for the six months ended June 30, 2024, representing a year-on-year growth of about 1.3%[12]. - The net profit for the same period was approximately RMB 139.3 million, reflecting a year-on-year increase of about 5.0%[12]. - Revenue from hip and knee implant products reached approximately RMB 555.2 million, a year-on-year increase of 0.5%[13]. - Revenue from spinal and trauma implant products was approximately RMB 69.1 million, showing a significant year-on-year growth of 37.6%[16]. - The custom products and services segment reported revenue of RMB 16.5 million, a decline of 40.6% compared to the same period in 2023[17]. - Total revenue for the six months ended June 30, 2024, was approximately RMB 657.1 million, an increase from RMB 648.7 million in the same period of 2023, representing a growth of 1.3%[72]. - Gross profit for the same period was RMB 398.5 million, slightly down from RMB 401.6 million, resulting in a gross margin of 60.5%[72]. - Operating profit increased to RMB 152.5 million from RMB 143.7 million, reflecting a growth of 6.0%[72]. - The company reported a net profit of RMB 139.3 million for the six months ended June 30, 2024, compared to RMB 132.6 million in the prior year, marking a growth of 5.0%[72]. Market Expansion and Product Development - The company successfully launched a knee surgery robot medical registration certificate, completing its digital orthopedic product line for hip and knee joints[8]. - The company expanded its overseas market presence, successfully entering Malaysia, Japan, and Spain, with significant market growth[9]. - The company anticipates new growth opportunities from the upcoming centralized procurement renewal, which will further solidify its leadership position in the artificial joint industry[9]. - The company achieved sales of a VTS visualization intelligent assistance system in the first half of 2024, indicating progress in its marketing efforts[9]. - The company maintains a diversified product line and a robust technology portfolio, including a 3D printing technology platform and intelligent navigation robot[8]. - The company launched the 3DACT Bio, a second-generation 3D printed spinal product, enhancing its product offerings in the spinal fusion surgery market[15]. - The company successfully expanded its overseas market by providing over 20 personalized custom prosthetics to Mexico, Pakistan, and Hong Kong[17]. - The company entered 56 new hospitals with its 3D printed spinal products in the first half of 2024, contributing to rapid growth in surgical implants[23]. - The company is focusing on digital orthopedic technology to increase market share in the mid-to-high-end market[30]. - The company plans to leverage its dual-brand strategy to enhance its presence in international markets, utilizing the advantages of "Made in China" products[31]. Research and Development - The company emphasizes continuous R&D innovation and quality service to enhance its competitive edge in the orthopedic field[11]. - The company has obtained a total of 414 invention patents and 612 utility model patents as of June 30, 2024[19]. - Research and development expenses were approximately RMB 63.6 million for the six months ended June 30, 2024, a decrease of 4.1% from RMB 66.3 million for the same period in 2023[51]. Financial Position and Cash Flow - Cash and cash equivalents amounted to approximately RMB 561.9 million as of June 30, 2024, an increase from RMB 757.4 million as of December 31, 2023[54]. - Operating cash flow for the first half of 2024 was RMB 120,761 thousand, a substantial increase from RMB 38,920 thousand in the same period of 2023, indicating a growth of about 209.5%[80]. - Net cash generated from operating activities reached RMB 96,854 thousand, compared to RMB 14,358 thousand in 2023, showing an increase of approximately 576.5%[80]. - Total liabilities decreased slightly to RMB 111,636 thousand from RMB 112,948 thousand, a reduction of about 1.2%[76]. - The company's net assets increased to RMB 2,490,074 thousand as of June 30, 2024, up from RMB 2,391,903 thousand, representing a growth of approximately 4.1%[76]. - The total equity attributable to equity shareholders rose to RMB 2,490,074 thousand, compared to RMB 2,391,903 thousand in 2023, reflecting an increase of about 4.1%[76]. - The company reported a total comprehensive income of RMB 140,513 thousand for the first half of 2024, compared to RMB 150,284 thousand in the same period of 2023[78]. Share Capital and Options - The number of issued and fully paid ordinary shares increased to 1,122,296,437 as of June 30, 2024, from 1,121,171,056 as of June 30, 2023[106]. - The company granted 838,784 shares under the share award plan in March 2022, with a fair value of RMB 3,106,000[117]. - The company has issued a total of 8,582,362 stock options under the stock option plan, representing approximately 0.76% of the issued share capital as of the mid-term report date[155]. - The stock option plan remains effective until December 19, 2027[155]. - The maximum number of shares that can be issued to any participant under the stock option plan in any 12-month period is capped at 1% of the issued shares as of the grant date[150]. - The company has established a stock reward plan to attract suitable talent for its ongoing operations and development[169]. Corporate Governance and Compliance - The audit committee reviewed the interim financial report for the six months ended June 30, 2024, and found it to be prepared in accordance with applicable accounting standards and listing rules[193]. - The company has adopted the standard code of conduct for securities trading as per the listing rules, and all directors confirmed compliance for the six months ended June 30, 2024[188]. - The company has no significant contracts with its controlling shareholders that remain in effect as of June 30, 2024[195]. - The company’s chairman and CEO positions are held by the same individual, Mr. Li Zhiqiang, who is a founder and has extensive industry experience[192]. - The company’s independent auditor, KPMG, conducted a review of the interim financial report in accordance with the relevant standards[198].

Investment Rating - The investment rating for the company is "Outperform the Market" [1][3][9] Core Views - The company achieved a slight revenue increase of 1.3% year-on-year, reaching 657 million, while net profit grew by 5% to 139 million in the first half of 2024, driven by effective cost control and increased demand for surgical procedures [1][4][9] - The company is a leader in the artificial joint sector in China, being the first to commercialize 3D printing technology, and is expected to benefit from market share gains through centralized procurement and expansion into overseas markets [1][9] - The company anticipates significant growth in net profit for 2024-2026, with projections of 265 million, 348 million, and 443 million respectively, reflecting year-on-year growth rates of 45.7%, 31.0%, and 27.3% [1][9] Financial Performance Summary - In the first half of 2024, the company reported a gross margin of 60.6%, a slight decrease of 1.3 percentage points year-on-year, primarily due to the increased proportion of centralized procurement products [1][4][5] - The sales expense ratio was 17.1%, down 0.9 percentage points year-on-year, attributed to reduced market development and promotional activities [1][5] - The net profit margin improved to 21.2%, an increase of 0.8 percentage points year-on-year, due to effective cost management in a changing macroeconomic environment [1][5] Revenue Breakdown - Revenue from hip joint implants reached 359 million, up 5.2%, while knee joint implants generated 196 million, down 7.2% [1][4] - Revenue from spinal and trauma implants surged by 37.6% to 69 million, driven by the introduction of innovative 3D printed products [1][4] - Overseas revenue amounted to 123 million, representing an 8.7% increase and accounting for 18.8% of total revenue, up 1.3 percentage points [1][4][5] Market Position and Strategy - The company has maintained its leading position in the market, particularly in economically developed provinces such as Guangdong, Shanghai, and Zhejiang, where its market share in surgical implants has significantly increased [1][4] - The company is focusing on expanding its overseas market presence and enhancing its digital orthopedic capabilities, which are expected to be new growth drivers [1][9]