Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company's performance is steadily growing, driven by its orthodontic business, with a revenue of 1.448 billion yuan in H1 2025, representing a year-on-year increase of 2.68% [5][11] - The gross margin remains stable, with a gross margin of 40.75% in H1 2025, showing a slight decrease of 0.08 percentage points year-on-year [12] - The company is expanding its operations through a "regional general hospital + branch" structure, enhancing its presence in the province and accelerating nationwide coverage through acquisitions and light asset franchises [14] Financial Performance - In H1 2025, the company achieved a net profit of 321 million yuan, up 3.67% year-on-year, with Q2 2025 net profit at 137 million yuan, an increase of 0.44% year-on-year [5][11] - Revenue breakdown by segment in H1 2025: - Implant business: 255 million yuan (18.9% of total revenue, +0.02% year-on-year) - Orthodontics: 229 million yuan (17.0% of total revenue, +7.75% year-on-year) - Pediatrics: 236 million yuan (17.6% of total revenue, -1.48% year-on-year) - Restoration: 230 million yuan (17.1% of total revenue, +3.59% year-on-year) [13] Future Projections - Revenue projections for 2025-2027 are as follows: - 2025: 3.029 billion yuan (+5.40% year-on-year) - 2026: 3.336 billion yuan (+10.13% year-on-year) - 2027: 3.737 billion yuan (+12.01% year-on-year) [15] - Net profit projections for the same period are: - 2025: 519 million yuan (+3.55% year-on-year) - 2026: 585 million yuan (+12.61% year-on-year) - 2027: 675 million yuan (+15.50% year-on-year) [15] Valuation Metrics - The company’s earnings per share (EPS) are projected to be: - 2025: 1.16 yuan - 2026: 1.31 yuan - 2027: 1.51 yuan [15] - Price-to-earnings (P/E) ratio is expected to decrease from 42.1 in 2023 to 31.2 in 2027 [16]