Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 60.43 [1]. Core Insights - The company reported a revenue of RMB 423 million for the first three quarters of 2025, a year-over-year decrease of 15.6%, and a net loss attributable to shareholders of RMB 56.09 million, indicating a shift from profit to loss. However, in the third quarter of 2025, revenue reached RMB 162 million, reflecting a year-over-year increase of 10.4% and a quarter-over-quarter increase of 18.8%, suggesting a recovery in revenue growth [1][2]. - The gross margin for the first three quarters of 2025 was 60.5%, down 8.7 percentage points year-over-year, primarily due to changes in product and regional revenue structure. The company anticipates a recovery in gross margin as overall business improves [2]. - The company is strategically enhancing its business capabilities by establishing localized marketing support centers and advancing the development of innovative products such as 3D digestive endoscopes and endoscopic robots [2]. Revenue and Profitability Outlook - The core segment of endoscopic equipment is expected to see a rebound in revenue as domestic medical device tenders show signs of recovery. The penetration rate for soft endoscopic treatments in China has significant room for growth, and the company’s high-end products are gaining recognition in key hospitals [3]. - The company’s product matrix for endoscopic consumables is extensive, and there is optimism for growth in this segment as overall promotion efforts intensify [3]. Product Launch and Market Position - The AQ-400 3D ultra-high-definition soft endoscope system was officially launched in the domestic market in the first nine months of 2025. This system is designed to significantly reduce the risk of missed or misdiagnosed cases while enhancing the safety and efficiency of minimally invasive surgeries [4]. - The successful launch and ongoing promotion of the AQ-400 system are expected to further increase the company's market share in core segments [4]. Financial Projections and Valuation - The company maintains its profit forecast, expecting net profits attributable to shareholders to be RMB 0.01 million in 2025, RMB 1.00 million in 2026, and RMB 1.60 million in 2027. The company is positioned as a leader in the domestic soft endoscope market, with a continuously expanding product matrix and active promotion efforts both domestically and internationally [5]. - A DCF valuation method was employed, with a WACC of 9.2% and a perpetual growth rate of 2.8%, maintaining the target price at RMB 60.43 [5].