11 March 2026 | 5:24PM HKT Equity Research China Healthcare: Medical Device & Services: Introducing 2028 full-year estimates In this note, we introduce 2028 full-year estimates for our China Medical Device & Services coverage (excl. Gushengtang and Topchoice). There is no change to our investment theses and ratings. We revise our estimates for Shandong Weigao, Angelalign, Gushengtang, and Topchoice to align with recent industry trends and management commentary through the quarter. We update our models and r ...

通策医疗 20260310 摘要 通策医疗商业模式由高客单价向高效率、普惠性医疗转型，2025Q1- Q3 营收 22.9 亿，归母净利润 5.14 亿，显示出较强业绩韧性。 种植牙集采激活中低端增量，公司种植业务中集采占比已达 75%- 80%；浙江单颗种植费降至 5,000 元左右，对标韩国经验，省内潜在需 求达 300-400 万颗。 推行"大部制"改革打破属地化管理，通过医生集团化运作实现全省资 源动态调度，应对牙医供给扩容，释放医生侧生产力并支撑平台化扩张。 数字化基建构建 AI 中台，实现 HIS 系统原生融合，通过唯一 ID 管理 700 万存量客户，提供智能导诊及 AI 病历质控，旨在实现服务标准化与 降本增效。 正畸业务通过自主品牌"隐秀"实施"不满意全额退款"策略，降低决 策门槛，利用价格优惠抢占敏感市场，目标实现客群规模倍增。 预计 2026 年归母净利润达 6.7 亿元，增长中枢接近 20%；给予 2026 年 45 倍 PE，对应目标价 67 元，需关注医疗服务调价超预期及改革不 及预期风险。 Q&A 市场观点认为通策医疗自 2021 年中以来股价持续下行，主要原因是什么？在 当前 ...

Core Viewpoint - The article discusses the transformation of Tongce Medical, a leading player in the dental healthcare sector, as it shifts from a high-price, high-margin consumer upgrade model to a more efficient, scalable, and inclusive quality medical paradigm after enduring significant market pressures [2]. Industry Changes - Consumer demand in the dental industry has become more segmented and rational, with a trend towards selecting higher cost-performance products and services, particularly evident in the invisible orthodontics sector where prices have consistently decreased over the past three years [3]. - The collective procurement mechanism has led to a rapid decline in dental implant prices, making the mid-to-low-end market a competitive battleground. This price drop has significantly improved the accessibility of dental services and stimulated growth in the mid-to-low-end market [3]. Company Growth Strategy - Tongce Medical is restructuring its production relationships through a departmental reform that breaks traditional localized management, establishing a vertical organizational system based on specialized capabilities and digital systems for comprehensive scheduling, laying the groundwork for platform transformation and operational efficiency [4]. - The company is developing a market grid system that covers approximately 30 million consumers, reaching nearly 50% of the provincial population. The introduction of mid-to-low-end products in its implant and orthodontic businesses is expected to unleash growth potential, benefiting from an expanding customer base and business synergy [4]. - The integration of an AI platform as a central infrastructure is enhancing operational, clinical, and service upgrades by embedding AI deeply into the entire treatment process [4]. Investment Outlook - The company is expected to maintain its advantages in the mid-to-high-end market while penetrating the low-price market. Adjustments to the net profit forecasts for 2025-2027 indicate growth rates of xx%, xx%, and xx%, respectively. The current stock price corresponds to PE ratios of xx, xx, and xx for the same years. Given the strengthening brand power and strategic transformation, the company is anticipated to achieve clear and rapid growth, warranting a higher valuation level [5].

Group 1: A-Share Buyback Events - During the period from February 23, 2026, to March 1, 2026, a total of 6 listed companies announced shareholder buyback plans, with the average buyback amount as a percentage of total market capitalization being 0.18% for Aidi Pharmaceutical, 1.09% for Binhua Co., 0.04% for Tongce Medical, 0.07% for Huaneng Hydropower, 1.69% for Biyinlefen, and 0.80% for Conch Cement [1][8][11]. Group 2: Key Companies of Interest - **Biyinlefen**: The company announced its first buyback and the controlling shareholder plans to buy back more than 1% of shares, with an amount between 100 million and 200 million RMB, reflecting confidence in the company's long-term prospects as a leading high-end apparel group focused on golf lifestyle [2][13]. - **Aidi Pharmaceutical**: The controlling shareholder plans to buy back 0.18% of shares, with an expected turnaround from loss to profit and a high growth rate in net profit forecasted [2][14][15]. - **Conch Cement**: The controlling shareholder plans to buy back 0.80% of shares, with a buyback amount between 7 billion and 14 billion RMB, indicating recognition of the company's long-term value in the cement industry [3][20][21]. Group 3: Management Buyback Announcements - From February 23, 2026, to March 1, 2026, 9 listed companies announced management buyback plans, with the only company exceeding 0.01% of total market capitalization being Sruy New Materials [11].

Core Viewpoint - Tongce Medical's executives are planning to repurchase shares, reflecting their confidence in the company's future growth and long-term investment value [1][5]. Group 1: Share Repurchase Plan - The executives, including Chairman Wang Yi and other senior management, plan to increase their holdings between February 13, 2026, and August 13, 2026, with a total investment of no less than 6 million yuan and up to 12 million yuan [1][4]. - The specific amounts for individual executives include Wang Yi, Huang Yuhua, and Zhang Hua each planning to invest between 1.5 million to 3 million yuan, while CFO Xu Guoxi plans to invest 500,000 to 1 million yuan, and Zhao Min plans to invest 1 million to 2 million yuan [1][4]. Group 2: Recent Share Purchases - As of February 13, 2026, the executives have already purchased a total of 38,200 shares for approximately 1.82 million yuan [2][4]. - The breakdown of recent purchases includes Wang Yi buying 10,500 shares for 499,600 yuan, Huang Yuhua buying 10,000 shares for 476,100 yuan, and Zhang Hua buying 10,000 shares for 473,300 yuan [3][4]. Group 3: Company Performance and Future Outlook - Tongce Medical's stock price has seen fluctuations, dropping to 35.54 yuan per share in April 2024 but recovering to 50.03 yuan per share by February 24, 2026, with a total market capitalization of 22.38 billion yuan [2][5]. - The company aims for a 30% year-on-year growth in overall performance for 2026, supported by ongoing reforms and an internal revenue doubling plan [2][7]. - For the first three quarters of 2025, Tongce Medical reported revenue of 2.29 billion yuan, a year-on-year increase of 2.56%, and a net profit of 514 million yuan, up 3.16% [7].

Summary of Conference Call on Healthcare Services and Pharmacy Sector Industry Overview - The focus is on the healthcare services and pharmacy sectors within the pharmaceutical industry, particularly consumer-oriented segments, which are currently viewed positively due to historical low valuations after a prolonged adjustment period [1][2]. Key Points and Arguments Healthcare Services - The healthcare services sector has experienced significant declines, with current valuations at historical lows, indicating a potential for recovery by 2026 [1]. - Specific companies highlighted for their optimistic 2026 guidance include Tongce Medical, Gushengtang, and Aier Eye Hospital, all expected to show double-digit growth [1][2]. - The recovery in the sector is anticipated to be driven by improvements in supply structure and consumer environment, leading to a business rebound [2]. - Aier Eye Hospital is introducing new consumer-oriented surgical procedures, which may increase average transaction values despite stable surgical volumes [2]. Market Trends - Data from October 2025 shows positive growth in outpatient services in cities like Chongqing and Tianjin, with increases of 5-6% and 13-14% respectively [3]. - The overall trend indicates a recovery in both service volume and pricing, particularly in consumer-oriented medical fields like ophthalmology [3][4]. AI Integration - AI is expected to empower healthcare service companies, with applications like Ant Group's AI health app showing significant user growth, indicating a new growth driver for leading healthcare service firms [4][5]. Pharmacy Sector - The pharmacy sector is experiencing notable improvements in performance since Q3 2025, with leading companies showing consistent same-store sales growth [6]. - The sector is supported by government policies aimed at increasing industry concentration and chain store rates, which are expected to drive medium-term performance [6][7]. - Companies like Yifeng Pharmacy and Dazhong Pharmacy are highlighted for their strong cash flow and dividend yields, with Dazhong reporting a 60% dividend payout ratio [6][7]. Online vs. Offline Dynamics - The online pharmacy market is growing rapidly, but it serves a different demographic compared to traditional pharmacies, which cater more to older consumers [7][8]. - The online pharmacy market is projected to grow significantly, driven by products like GLP-1, but the overall growth rate may stabilize as both online and offline markets adjust [9][10]. Regulatory Environment - Recent government policies emphasize enhancing pharmacy service capabilities and supporting prescription outsourcing, which could lead to increased revenue opportunities for pharmacies [13][14]. - The focus on compliance and competition is expected to benefit larger pharmacy chains with established networks and resources for mergers and acquisitions [17]. Home Medical Devices - The home medical device sector is poised for growth due to an aging population and increasing health awareness, with significant potential in health monitoring devices like blood pressure monitors and glucose meters [18][19]. - Companies such as Yuyue Medical and Sanofi are recommended for their strong growth prospects in this segment [21]. Conclusion - The healthcare services, pharmacy, and home medical device sectors are expected to experience a bottom reversal, driven by improving fundamentals and supportive government policies. Key players in these sectors are well-positioned to capitalize on these trends, making them attractive investment opportunities moving forward [1][21].

Group 1 - Tongce Medical's chairman and executives plan to increase their shareholding by 6 to 12 million yuan within six months, following recent purchases totaling approximately 1.34 million yuan [1] - Luxshare Precision has repurchased 9.9006 million shares for nearly 500 million yuan, representing 0.14% of its total share capital [2] - Jintai Construction's subsidiary won a project in Malaysia worth approximately 281 million yuan, accounting for 1.53% of the company's audited revenue for 2024 [3] Group 2 - Kela Co. announced the removal of independent director Jing Naiquan due to loss of independence and failure to fulfill duties [4] - Mingyang Smart Energy is planning to acquire 100% of Zhongshan Dehua Chip Technology Co., with ongoing audits and evaluations [5] - BGI Genomics intends to sell a subsidiary's equity for approximately 50 million USD and adjust licensing agreements [6] Group 3 - Guotou Capital reported that valuation adjustments at Guotou Ruijin Fund are expected to impact 2026 net profit by less than 5% [7] - Donghong Co. won a bid for a pressure steel pipe project worth 353 million yuan [9] - Yashi Chuangneng's major shareholder's shares, amounting to 2.9165% of total shares, will be auctioned, but it will not affect the company's operations [10] Group 4 - Frontier Biotech signed an exclusive licensing agreement with GlaxoSmithKline, receiving an upfront payment of 40 million USD and potential milestone payments totaling up to 950 million USD [11] - Kede CNC's major shareholders committed not to reduce their holdings for the next six months [12] - Richen Co. reported a 31.87% increase in net profit for 2025, driven by market expansion and operational efficiency [13] Group 5 - Jiayou International's PPP project in Zambia has officially commenced commercial operations and charging [14] - Junxin Co. updated its H-share listing application, pending approvals from regulatory bodies [15] - Shuangliang Energy's subsidiary won a bid for a 100 million yuan project in the Middle East [16][17] Group 6 - Baili Tianheng's drug candidate achieved primary endpoints in a Phase III clinical trial for triple-negative breast cancer [18] - ST Jinglan announced a significant stock price increase of 86.90% without major changes in performance, warning of potential stock suspension if prices continue to rise [19] - *ST Huiteng projected a revenue of 330 to 400 million yuan for 2025, with negative net profit expected [20]

Group 1 - Heptares Therapeutics has entered into a licensing and equity cooperation agreement with Solstice Oncology for HBM4003, granting exclusive rights for development and commercialization outside Greater China, with potential upfront payments exceeding $105 million [1] - Frontier Biotech has signed an exclusive licensing agreement with GlaxoSmithKline (GSK) for two small RNA (siRNA) pipeline products, one of which is in the IND stage, marking a significant breakthrough in its international strategy [2] - CStone Pharmaceuticals has received approval from the UK Medicines and Healthcare products Regulatory Agency for a new indication of Sugli monoclonal antibody for treating adult patients with advanced non-small cell lung cancer, highlighting its global operational capabilities [3] Group 2 - Novo Nordisk's stock has dropped significantly following the disappointing clinical data for CagriSema, which showed only a 23% weight loss effect, failing to meet the primary endpoint of the trial [4] - Tongce Medical's chairman and executives have announced plans to increase their shareholding in the company, aiming to stabilize market sentiment amid pressures from weak consumer demand and dental implant procurement [5]

Investment Rating - The industry investment rating is "Positive" (maintained) [5][41]. Core Insights - The medical services and pharmacy sectors have undergone significant adjustments since 2021, with valuations and performance returning to historically low levels. For instance, leading companies like Aier Eye Hospital, Tongce Medical, and Yifeng Pharmacy have seen their total market values decline by 73.5%, 81.9%, and 45.9% respectively since the Spring Festival of 2021 [1][16]. - The consumer medical industry is experiencing an improvement in competition and safety margins, aided by the implementation of relevant policies and a potential recovery in consumer willingness to spend [2]. - The offline pharmacy sector is benefiting from policy incentives and an improved competitive landscape, with significant support for prescription outflow and industry restructuring [3][32]. Summary by Sections 1. Valuation Bottoming and Low Holdings - The medical services and pharmacy sectors have faced prolonged adjustments, leading to valuations at historically low levels. The public fund holdings in these sectors have also decreased [10][11]. - The leading companies in the industry have seen substantial market value adjustments, indicating a low public fund holding ratio [16]. 2. Accumulating Reversal Momentum - The medical services and pharmacy sectors are expected to experience a dual recovery in performance and valuation, driven by improved competition and policy clarity [21]. - The medical services sector is witnessing a gradual recovery in income growth, particularly in the ophthalmology sector, which has seen a slowdown in revenue growth after a rapid recovery period [22]. - The pharmacy sector is experiencing a shift towards health service platforms, supported by policy changes that encourage pharmacies to expand their service offerings [33]. 3. Investment Views - Focus on leading companies in the medical services sector that have strong chain expansion capabilities and supply chain advantages, such as Aier Eye Hospital and Tongce Medical, which are expected to benefit from consumer upgrades and market demand [4][37]. - In the pharmacy sector, attention should be given to leading chains with strong supply chain advantages and management capabilities, such as Yifeng Pharmacy and Dazhenglin, which are well-positioned to capture market share and benefit from policy changes [4][37].

Core Viewpoint - The company Tongce Medical (600763) announced significant insider buying by its executives, indicating confidence in the company's future performance [1] Group 1: Insider Buying Details - Chairman Wang Yi purchased 10,500 shares for a total of 499,600 yuan [1] - Director Huang Yuhua bought 10,000 shares for 476,100 yuan [1] - Secretary Zhang Hua acquired 10,000 shares for 473,300 yuan [1] - Other management personnel Zhao Min purchased 7,700 shares for 367,100 yuan [1] Group 2: Future Buying Plans - The company's directors and executives plan to collectively buy between 6 million yuan and 12 million yuan worth of shares within six months from the announcement date [1] - The share purchase will be executed through the Shanghai Stock Exchange without a set price range, depending on stock price fluctuations and overall market trends [1]