Financial Performance - In the first three quarters of 2025, the company achieved a revenue of CNY 1.556 billion, a year-on-year decrease of 29.13% [1] - Net profit for the same period was CNY 453 million, down 42.75% year-on-year [1] - Operating cash flow was CNY 573 million, exceeding net profit by CNY 120 million, indicating strong cash flow quality [1] - Gross margin stood at 79.59%, while net margin was 29.04%, reflecting robust overall profitability [1] Market Challenges - Revenue decline attributed to reduced industry demand and intensified market competition [2] - Decrease in production led to a smaller reduction in costs compared to revenue, resulting in a 1.72% drop in gross margin [2] - Operating and business expansion costs did not decrease as much as revenue, contributing to a significant drop in net profit [2] Regulatory Impact - New medical service pricing policies for the urological system, effective June 2025, integrated 421 technical projects into 108, with blood purification technologies gaining formal recognition [3] - As of October 21, 2025, 27 provinces have set prices for blood purification services, with 25 provinces already implementing them, indicating potential policy-driven growth [3] Product Pricing Strategy - The company reduced the price of the KHA130 blood purifier to CNY 339 to fulfill social responsibility and respond to market competition [4] - KHA130 accounted for 5.22% of total revenue in the first three quarters of 2025, with minimal impact on overall gross margin [4] Procurement Risks - Main products have not yet been included in centralized procurement, but future inclusion remains a possibility [5] - If included, there could be risks of price declines affecting gross margin and profitability [6] Innovation and Development - The company has developed various products targeting conditions like uremia and liver disease, maintaining industry leadership [7] - There is ongoing exploration into new business areas related to metabolic cardiovascular diseases and health management [7] Shareholder Engagement - The company has implemented multiple measures to return value to shareholders, including a CNY 200 million share buyback in 2022 and a total of CNY 1 billion in buybacks from 2021 to 2024 [8] - Ongoing cash dividends and stock incentive plans reflect confidence in future growth [8]

Core Viewpoint - The company experienced a significant decline in revenue and net profit in the first three quarters of 2025, attributed to inventory management and price adjustments, but maintains a positive long-term growth outlook due to increasing market penetration and product promotion efforts [1][2][3]. Financial Performance - Revenue for 1-3Q25 was 1.556 billion yuan, down 29.1% year-on-year, with a net profit of 453 million yuan, down 42.7% year-on-year [1]. - In 3Q25, revenue was 422 million yuan, a decrease of 39.8% year-on-year, and net profit was 63.51 million yuan, down 73.4% year-on-year [1]. Cost Structure and Efficiency - The gross margin for 1-3Q25 was 79.6%, a decrease of 1.7 percentage points year-on-year, likely due to changes in product sales structure [2]. - The sales, management, and R&D expense ratios were 24.6%, 7.4%, and 9.4%, respectively, with year-on-year increases of 1.4, 1.5, and 1.5 percentage points, reflecting a focus on long-term development despite short-term revenue declines [2]. Product Development and Market Position - The company remains optimistic about the long-term development of its core products, particularly blood purification devices, despite a decline in revenue due to various factors [3]. - As of 1H25, the company had over 6,000 and 2,000 hospital covers for its kidney and liver products, respectively, indicating strong market presence [3]. - Clinical recognition of the company's products is expected to improve with new guidelines and consensus from industry experts [3]. Business Expansion and New Opportunities - The company is actively expanding into new fields, including critical care and blood purification equipment, with over 1,800 and 2,000 hospitals covered by its respective products as of 1H25 [4]. - The company has also expanded its international presence, with products available in over 98 countries and regions, and received CE certification for its Future F20 blood purification device [4]. Profit Forecast and Valuation - The company expects net profits of 551 million, 607 million, and 668 million yuan for 2025-2027, with downward adjustments of 34%, 36%, and 38% compared to previous estimates [5]. - The company is considered a leader in the domestic blood purification industry, with a target price of 25.09 yuan based on a 33x PE valuation for 2026 [5].

Core Viewpoint - The company has reported a significant reduction in sales expenses and is adjusting the pricing of its blood perfusion device in response to new healthcare policies in China [1] Group 1: Sales Expenses - In the first half of 2025, the company's sales expenses amounted to 24.961 million yuan, representing a year-on-year decrease of 26.75% [1] Group 2: Policy Impact - The National Healthcare Security Administration issued a guideline in June this year, adding "blood dialysis perfusion fee" and "plasma adsorption fee" as new items, which have been officially included in the medical insurance projects with independent pricing standards [1] - Over twenty provinces in China are actively implementing these policies, which are expected to drive growth in the clinical use of blood perfusion and adsorption products [1] Group 3: Pricing Adjustment - Starting from September 2025, the company will adjust the price of its KHA130 blood perfusion device, which is specifically used for maintenance hemodialysis patients, as part of its commitment to social responsibility and patient care [1]