Summary of Shanghai United Imaging Healthcare Co. Conference Call Company Overview - **Company**: Shanghai United Imaging Healthcare Co (UIH) - **Industry**: China Healthcare - **Stock Rating**: Equal-weight - **Price Target**: Rmb158.00 - **Current Price (as of October 29, 2025)**: Rmb146.56 - **Market Capitalization**: Rmb120,788.6 million - **Fiscal Year Ending**: December 2024 Key Takeaways Financial Performance - **3Q Revenue**: Rmb2.84 billion, representing a 75.4% year-over-year increase, aligning with Morgan Stanley's estimates [8] - **Segment Growth (9M25)**: - CT: +7.9% - MR: +40.2% - MI: +22.4% - XR: +25.1% - RT: +28.0% - Service: +28.4% [8] - **Gross Profit Margin (GPM)**: Increased by 3.1 percentage points year-over-year, but decreased by 1.6 percentage points quarter-over-quarter [8] - **Recurring Net Profit**: Rmb87.6 million with a margin of 3.1%, below Morgan Stanley's expectations [8] Market Dynamics - **China Imaging Market Growth**: UIH's growth of 24% in China outpaced the broader imaging market growth of approximately 8% year-over-year in 9M25, indicating accelerated market share gains [2] - **Trade-in Programs**: 2025 trade-in programs are being implemented faster than in 2024, expected to last into the first half of 2026 [2] - **Government Initiatives**: Early local government initiatives in 3Q aimed at reducing unhealthy competition, aligning with the "anti-involution" campaign [2] International Performance - **North America**: Grew by 50% year-over-year (~Rmb700 million, service revenue +80%) [3] - **Europe**: More than doubled (>Rmb400 million) [3] - **APAC (excluding China)**: Grew by over 20% [3] - **Emerging Markets (Middle East, LatAm, Africa)**: Grew by 30% (~Rmb200 million) [3] Expense Management - **Expense Ratios**: Management targets for 2025 are approximately 16-17% for selling, <15% for R&D, and ~5% for G&A, with expectations for slight declines in selling and R&D ratios in 2026 [4] Product Launches - **Ultrasound Products**: A full suite of ultrasound products is set to launch in China in November and overseas in December, with a target of Rmb500 million in orders and approximately Rmb300 million in sales for 2026 [8] Valuation and Risks - **Valuation Methodology**: Based on a discounted cash flow (DCF) model with a WACC of 8.8% and a terminal growth rate of 4.0% [9] - **Risks to Upside**: Favorable regulatory developments, market share gains, margin expansion, and fast overseas expansion [11] - **Risks to Downside**: Unexpected regulatory tightening, less government support, market share losses, and geopolitical risks [11] Additional Insights - **Management's Outlook**: Strong momentum is expected to sustain into 4Q, with overseas growth contributing significantly to recurring service revenue and margin expansion [3][8] - **Dual-Listing Consideration**: UIH has not ruled out a dual-listing on the Hong Kong Stock Exchange but currently has no concrete plans due to sufficient cash reserves [8]