Investment Rating - The investment rating for the company is "Outperform the Market" [6][22]. Core Views - The company has shown a positive revenue growth in the international business, with a projected acceleration in revenue growth for the fourth quarter compared to the third quarter [1][21]. - The company is experiencing a recovery in its life information and support product lines, with significant growth in minimally invasive surgery products [2][21]. - The company maintains a strong research and development capability, with a digitalization strategy involving "Equipment + IT + AI" that is expected to redefine the global positioning of Chinese medical devices [3][21]. Financial Performance Summary - In the first three quarters of 2025, the company achieved a revenue of 25.834 billion yuan, a decrease of 12.4% year-on-year, and a net profit of 7.570 billion yuan, down 28.8% [1]. - The third quarter of 2025 saw a revenue of 9.091 billion yuan, representing a year-on-year increase of 1.5% and a quarter-on-quarter increase of 6.9% [1]. - The gross profit margin for the first three quarters of 2025 was 62.0%, down 2.9 percentage points, primarily due to price pressures in the domestic market [3]. - The operating cash flow for the first three quarters of 2025 was 7.27 billion yuan, down 34.3%, maintaining a healthy level compared to net profit [3]. Revenue and Profit Forecast - The company has revised its profit forecast downwards, expecting net profits for 2025-2027 to be 9.879 billion, 11.153 billion, and 13.129 billion yuan, respectively, with year-on-year growth rates of -15.3%, 12.9%, and 17.7% [3][21]. - The current stock price corresponds to a price-to-earnings ratio (PE) of 25.3, 22.4, and 19.0 for the years 2025, 2026, and 2027, respectively [3][21]. Market and Product Performance - The international revenue accounted for over 50% of total revenue, with a year-on-year growth of 12% in the third quarter of 2025, particularly strong in the European market, which grew over 20% [2][21]. - The company’s medical imaging product line saw stable revenue, while the in vitro diagnostics line experienced a decline of 2.81%, although international IVD showed double-digit growth [2][21]. Dividend Policy - The company has approved a cash dividend distribution of 1.637 billion yuan for the third quarter of 2025, resulting in a cumulative dividend payout ratio of 65% for the year [1].

Market Growth and Challenges - The domestic medical device market has experienced a compound annual growth rate (CAGR) of 20% due to new infrastructure initiatives and government support, but is currently facing challenges due to tight local fiscal conditions [2][3] - The issuance of medical special bonds has seen a rapid year-on-year growth, indicating a potential recovery in hospital equipment procurement [3] - Monthly bidding data for various medical devices has been continuously recovering since December 2024, although the time from bidding to revenue recognition has significantly lengthened [3][6] Long-term Market Potential - The company believes that the long-term growth potential in the domestic market remains substantial, driven by an aging population and increasing demand for quality medical resources [3][4] - The company is expanding its market reach through internal R&D and external acquisitions, focusing on "equipment + IT + AI" digital solutions [3][4] Competitive Advantages - The company has transitioned through three growth phases: price advantage, engineering advantage, and now technology innovation, which positions it uniquely against international competitors [4][6] - As the only company headquartered in a developing country among the top 50 medical device firms globally, the company has established a broad and deep business layout that surpasses international brands [4][6] Financial Performance - In Q1 2025, domestic revenue declined over 20% year-on-year but increased by over 50% compared to Q4 2024, reflecting a recovery trend [6][7] - International business growth was less than 5% year-on-year, but the compound growth rate over the past two years exceeds 15%, with developing countries showing nearly 19% growth [6][7] Future Outlook - The company anticipates a significant turning point in domestic business starting Q3 2025, supported by the resumption of medical equipment update projects [7] - The international market is expected to see a recovery in growth rates, particularly in developing countries, due to ongoing localization efforts [7] Revenue Contributions by Business Line - In 2024, the in-vitro diagnostics (IVD) segment generated revenue of 13.765 billion, growing 10.82% year-on-year, with international IVD growth at 30% [11][12] - The medical imaging segment achieved revenue of 7.498 billion, with international growth exceeding 15% [11] - The life information and support segment generated 13.557 billion, with minimally invasive surgery growing over 30% [11] Strategic Investments - The company has invested in Huatai Medical, acquiring a 20% stake to enhance its presence in the cardiovascular sector and foster new growth points [9][10] - The collaboration aims to leverage resource integration for product innovation and operational efficiency, particularly in the three-dimensional electrophysiology systems [10]