Core Viewpoint - The company's revenue growth in H1 2025 is under short-term pressure, while profit growth meets expectations. Looking ahead to H2 2025, the nationwide implementation of the artificial joint procurement renewal policy is expected to stabilize the industry pricing system. The company has seen price increases in hip and knee joint bids during this renewal, indicating a potential for both volume and price growth. The orthopedic surgery volume is expected to recover, and with a low revenue base from the previous year, the company is projected to experience a trend of lower performance in the first half and higher performance in the second half of the year. In the medium to long term, the company's forward-looking layout in 3D printing, surgical robots, and digital orthopedic ecosystems will create solid technological barriers and open new growth spaces. Additionally, the overseas market is expected to become a strong growth engine as the "JRI + Aikang" dual-brand strategy deepens and product registrations continue to progress [1][2][3]. Financial Performance - In H1 2025, the company achieved a revenue of 694 million yuan, a year-on-year increase of 5.6%, and a net profit of 161 million yuan, a year-on-year increase of 15.3%. The earnings per share (EPS) was 0.14 yuan. The revenue growth was driven by accelerated import substitution due to volume-based procurement policies, leading to increased sales of products within the procurement scope. The company made breakthroughs in clinical applications at high-end medical institutions, particularly in key provinces such as Shanghai, Guangdong, and Zhejiang [1][2][3]. Product Performance - By product, the company reported hip joint revenue of 410 million yuan (up 14.0% year-on-year), knee joint revenue of 194 million yuan (down 0.7% year-on-year), primarily due to price declines in single condyle products outside the procurement scope, and spinal and trauma revenue of 51 million yuan (down 26.5% year-on-year) due to policy impacts. Revenue from digital orthopedic customized products and services was 18 million yuan (up 3.9% year-on-year). The K3 intelligent surgical robot, developed in-house, was approved for market launch in May 2025, with over 1,700 clinical surgeries completed using the intelligent assistance devices [2][3]. Market Outlook - The comprehensive execution of the artificial joint procurement renewal policy is expected to accelerate performance in the second half of the year. The company is steadily increasing its market share due to its cost-effectiveness and localized service advantages, which are accelerating import substitution and coverage in high-end hospitals. The iCOS digital orthopedic platform provides a full-process solution from preoperative planning to intraoperative navigation and postoperative monitoring. With the approval of the K3 intelligent surgical robot, digital products and implants are expected to see collaborative growth. The international market is viewed as the second growth curve for the company, with the dual-brand strategy effectively covering different overseas markets and gradually increasing the proportion of overseas revenue, indicating significant growth potential [2][3]. Financial Metrics - The company's gross margin for H1 2025 was 59.1%, a decrease of 1.5 percentage points year-on-year, primarily due to changes in product structure, with a decline in the revenue share of spinal and trauma implants. The company maintained good expense control, with a sales expense ratio of 16.9% (down 0.2 percentage points year-on-year) and a management expense ratio of 11.2% (up 0.2 percentage points year-on-year). The R&D expense ratio remained stable at 9.6%, reflecting ongoing investment to maintain technological leadership. As of June 30, 2025, the company's net current assets were approximately 1.846 billion yuan, an increase of about 264 million yuan compared to the end of 2024, mainly due to improvements in operational performance [3]. Profit Forecast - In the short term, the volume and price growth effects from the artificial joint procurement renewal are expected to manifest, driving high growth in the business for the second half of the year. In the medium to long term, the company's forward-looking layout in innovative products such as 3D printing and surgical robots, along with the digital orthopedic ecosystem, will create solid technological barriers and open new growth spaces. The overseas business is anticipated to become a strong growth engine as the "JRI + Aikang" dual-brand strategy deepens and product registrations progress. The company is projected to achieve revenues of 1.543 billion, 1.819 billion, and 2.101 billion yuan for 2025-2027, with corresponding growth rates of 14.61%, 17.91%, and 15.50%. Net profits are expected to be 330 million, 385 million, and 438 million yuan, with corresponding growth rates of 20.60%, 16.48%, and 13.84%, maintaining a "buy" rating [3].
爱康医疗(1789.HK)：中报业绩符合预期 止血纱及脑膜胶新产品快速放量