Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, but showed significant improvement in the second quarter, indicating a potential recovery in performance driven by the resumption of domestic procurement and new product launches [1][2]. Group 1: Financial Performance - In H1 2025, the company achieved revenue of 964 million yuan, a year-over-year decrease of 4.78%, and a net profit of 47 million yuan, down 72.43% year-over-year [1]. - Q2 2025 saw revenue of 534 million yuan, a slight year-over-year increase of 0.17% and a quarter-over-quarter increase of 24.24%, with net profit at 39 million yuan, down 44.65% year-over-year but up 382.45% quarter-over-quarter [1]. - The company’s gross margin decreased to 62.08%, down 5.35 percentage points, and net margin fell to 4.88%, down 11.96 percentage points [3]. Group 2: Market and Product Insights - The domestic bidding and procurement for medical devices are gradually recovering, leading to a significant improvement in Q2 performance, with expectations for continued growth in the second half of the year [2]. - The company’s ultrasound business generated revenue of 550 million yuan, down 9.87%, while the endoscope business saw revenue of 388 million yuan, up 0.08%, indicating overall stability [2]. - The company is focusing on high-intensity strategic investments in R&D and sales, with a sales expense ratio of 31.63% and R&D expense ratio of 25.31%, aimed at accelerating product upgrades and market expansion [3]. Group 3: Future Outlook - The company anticipates revenue growth from 2025 to 2027, with projected revenues of 2.318 billion, 2.712 billion, and 3.252 billion yuan, representing year-over-year growth rates of 15.09%, 17.00%, and 19.91% respectively [3]. - Expected net profits for the same period are 310 million, 454 million, and 598 million yuan, with year-over-year growth rates of 117.76%, 46.50%, and 31.68% respectively [3].

Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company has shown strong revenue growth in 2024, achieving 1.41 billion yuan, a year-on-year increase of 48.24%, while net profit attributable to shareholders reached 388 million yuan, up 27.77% [1] - The growth in the contact lens segment is robust, with a significant increase in revenue, and the company is optimistic about the launch of high-end new products in 2025 [2][3] - The profit growth rate is lagging behind revenue growth due to fluctuations in gross margins, influenced by increased competition and pricing pressures in the artificial lens and orthokeratology markets [2] Revenue and Profit Analysis - In 2024, the company reported revenue of 1.41 billion yuan, with a gross margin of 66.23%, down 9.78 percentage points year-on-year [2] - For Q1 2025, revenue was 357 million yuan, reflecting a 15.07% year-on-year growth, but net profit decreased by 10.05% [1] - The contact lens segment generated 426 million yuan in revenue, a remarkable increase of 211.84%, while the artificial lens segment saw revenue of 588 million yuan, up 17.66% [3] Market Expansion - Domestic sales reached 1.36 billion yuan, a 49.52% increase, while overseas sales were 46 million yuan, up 16.73% [4] - The company has established a comprehensive domestic sales network covering over 6000 hospitals and optical centers across 31 provinces and regions [4] - Internationally, the company has expanded its sales network to Europe, Asia, and Oceania, with products exported to over 30 countries [4] Financial Forecast - Revenue projections for 2025-2027 are 1.82 billion yuan, 2.38 billion yuan, and 3.07 billion yuan, respectively, with year-on-year growth rates of 29.2%, 30.5%, and 29.1% [4] - Net profit forecasts for the same period are 469 million yuan, 585 million yuan, and 725 million yuan, with growth rates of 20.8%, 24.8%, and 23.9% [4]