Investment Rating - The investment rating for China Resources Pharmaceuticals is Neutral with a 12-month price target of HK$6.17, representing an upside potential of 18.8% from the current price of HK$5.19 [8][29]. Core Insights - The company is experiencing soft growth in the first half of the year, leading management to lower previous guidance of double-digit year-on-year sales growth for 2025, pending a recovery in the second half [1][2]. - The distribution business is facing challenges due to a tough industry environment, and there are no clear signals of growth recovery as the national medical reimbursement fund remains tight [2][3]. - Cash collection is under pressure, with hospitals' financial positions still strained, resulting in delayed payments for non-VBP products despite some acceleration in cash collection for VBP products [3]. Summary by Sections Financial Performance - Revenue for 2025 is projected to be HK$271.5 billion, with a 5-year EPS CAGR of 10% for the manufacturing business and 5% for the distribution business [7]. - The company’s market cap is HK$32.6 billion, with an enterprise value of HK$133.8 billion [8]. Business Segments - The manufacturing business is valued at HK$31.4 billion, while the distribution business is valued at HK$4.1 billion [7]. - Specific challenges include slower growth for Sanjiu due to a high base, pressure on Boya from albumin VBP, and a softer growth trajectory for plasma collection [2]. Cash Management - To alleviate cash pressure, the company is managing its cash cycle actively, including de-prioritizing high-risk regions for receivables [3].

Investment Rating - The report maintains a "Buy" rating on Mindray and United Imaging, indicating confidence in their growth potential and market positions [96][99]. Core Insights - The procurement value of main medical devices in China showed a strong year-over-year growth of 91% in May 2025, despite a month-over-month decline of 13% [1]. - The report highlights a significant price pressure on ultrasound devices due to regional Value-Based Procurement (VBP), with average bid prices decreasing by approximately 20% compared to the 2024 average [10][12]. - Mindray's revenue is expected to be impacted by around 3% due to VBP pricing pressure, but the company is still projected to maintain robust growth in its end markets [30]. Summary by Sections Procurement Activity - Hospital procurement activity in China has clearly recovered, with a 33% increase in May 2025 compared to May 2023 [1]. - The report anticipates continued high year-over-year growth in procurement activity for June 2025 [1]. Device-Specific Insights - Ultrasound devices experienced a significant average bid price cut of 61% in Henan province, leading to a 20% decrease in average selling price (ASP) in May compared to the 2024 average [10][12]. - Other medical devices, such as CT scanners, are not currently facing similar price pressures as ultrasound devices [10][16]. Company Performance - Mindray reported a year-over-year growth of 52% in patient monitors and 103% in ultrasound devices for May 2025 [30][43]. - United Imaging is optimistic about the trade-in program in 2025, expecting smoother processes compared to 2024, although revenue recognition cycles have lengthened [29][99]. Market Trends - The report notes that both domestic and multinational companies achieved notable year-over-year growth in procurement, indicating a balanced competitive landscape [78]. - The trend of domestic substitution in the medical device market is not particularly evident in May, as both local and multinational companies performed well [78].