Investment Rating - The report maintains a rating of "Accumulate" for the company [4][6]. Core Views - The company experienced a significant revenue decline of 26.36% year-on-year in H1 2025, with a reported revenue of 260 million yuan and a net profit loss of 40.77 million yuan, indicating a shift from profit to loss [1][2]. - The decline in domestic revenue is attributed to the company's proactive inventory reduction strategy, while overseas business showed growth, particularly in Europe [2]. - The company is focusing on innovation and product development, with the new flagship product AQ-400 expected to enhance competitive differentiation and drive sales growth in 2026 [3][4]. Summary by Sections Financial Performance - In H1 2025, the company reported a revenue of 260 million yuan, down 26.36% year-on-year, and a net profit loss of 40.77 million yuan [1]. - The overall gross margin decreased by 9.07 percentage points to 62.39% due to a higher proportion of lower-margin overseas business [2]. Product Development - The AQ-400 product has received approval and is expected to significantly contribute to sales growth once launched [3]. - The company is investing heavily in R&D, with expenses reaching 73.81 million yuan in H1 2025, accounting for 28.35% of revenue [3]. Profit Forecast and Valuation - The profit forecasts for 2025-2027 have been revised downwards, with expected net profits of 0.06 billion yuan, 0.49 billion yuan, and 0.65 billion yuan respectively [4]. - The company is expected to maintain its leading position in the industry due to its differentiated product offerings [4].

Core Viewpoint - The company is experiencing a decline in revenue due to industry performance and inventory adjustments, but is optimistic about future recovery and growth in overseas markets [4]. Group 1: Financial Performance - In Q1 2025, the company's revenue was 124 million, a year-on-year decrease of 26.92%, with a net profit attributable to shareholders of -28.79 million, indicating a shift from profit to loss [4]. - The decline in revenue is attributed to weak recovery in medical device procurement and proactive inventory adjustments by the company [4]. Group 2: Product Development and Market Position - The company launched the AQ-150 Series and AQ-120 Series endoscope systems in October 2024, enhancing its product lineup and market competitiveness [5]. - The AQ-150 Series features a 10.1-inch touchscreen and aims to simplify operations, while the AQ-120 Series is designed for versatility in various medical environments [5]. - The new AQ-400 series incorporates advanced hyperspectral technology, expected to enhance the company's competitive edge and drive sales growth in 2026 [5]. - Ongoing R&D efforts include the development of 3D flexible endoscopes, AI diagnostic technologies, and ERCP robots, aimed at improving safety, reliability, and convenience in future products [5]. Group 3: International Expansion - Since 2024, the company has been actively expanding its overseas marketing network, achieving product approvals and market promotion in multiple countries, which is expected to significantly boost brand influence and drive rapid growth in international business [4].

Investment Rating - The report maintains a "Buy" rating for the company [3][8]. Core Views - The company is expected to achieve a revenue of 750 million (up 10.54%) in 2024, but the net profit attributable to the parent company is projected to decline to 21 million (down 63.68%) [3]. - The decline in profit is primarily due to a decrease in domestic procurement totals and increased expenses related to clinical promotion, marketing channel expansion, and R&D projects [3]. - The international business is leading growth, with overseas revenue expected to reach 161 million (up 42.70%) [3]. - The company has adjusted its profit forecasts for 2025-2027, expecting net profits of 84 million, 131 million, and 200 million respectively [3]. Financial Summary - Revenue for 2024 is projected at 750 million, with a year-over-year growth of 10.5% [6]. - The gross margin is expected to be 68.1%, down from 73.8% in 2023 [6]. - The net profit margin is projected to be 2.8% in 2024, significantly lower than 8.5% in 2023 [6]. - The company anticipates a recovery in bidding in 2025, which could lead to increased domestic market volume and sustained high growth in international business [3][6]. Product and Market Development - The company is accelerating the installation of its AQ300-4K ultra-high-definition systems in tertiary hospitals, with significant sales growth in high-end products [4]. - New product launches include various advanced endoscopic systems, enhancing the company's product line and market share in the flexible endoscope industry [4][5]. - The company is actively developing 3D flexible endoscopes and AI diagnostic technologies, which are expected to enhance safety, reliability, and convenience in future products [5].