Core Viewpoint - Aibo Medical has signed a Letter of Intent with Demei Medical to acquire at least 51% of its shares, with an estimated valuation of Demei Medical not exceeding 1 billion yuan, indicating a stable profit growth commitment from 2026 to 2028 [1][2] Acquisition Details - The acquisition is expected to be financed through a combination of self-funds and bank loans [1] - Demei Medical's preliminary valuation corresponds to a price-to-earnings (PE) ratio of approximately 22X, 18X, and 15X for the years 2026, 2027, and 2028 respectively [1] - Demei Medical's net profit commitments for 2026, 2027, and 2028 are projected to be 45 million, 55 million, and 65 million yuan, representing year-on-year growth rates of +28.5%, +22.2%, and +18.2% respectively [1] Company Profile - Demei Medical, established in 2015, is a leading brand in China's sports medicine sector, offering a comprehensive range of products including imaging equipment, surgical tools, implantable consumables, and rehabilitation devices [1] - The company has achieved significant breakthroughs in core technologies and has established a full industry chain layout, making it a representative manufacturer of sports medicine in China [2] Financial Performance - Demei Medical's projected revenues for 2023, 2024, and 2025 are 178 million, 236 million, and 286 million yuan, with year-on-year growth rates of +32.6% and +21.4% [2] - The adjusted net profits for the same years are expected to be -7.08 million, 9.29 million, and 23.60 million yuan, indicating a significant increase in profitability [2] International Expansion - Demei Medical has developed strong international capabilities, with a sales network covering over 50 countries and regions, and plans to participate in more than 10 international exhibitions and academic exchanges in 2025 [2] - The collaboration with Aibo Medical is expected to enhance its overseas business, which accounted for 5.5% of total revenue in the first half of 2025 [2] Profit Forecast and Investment Outlook - Aibo Medical is projected to achieve revenues of 1.572 billion, 1.823 billion, and 2.173 billion yuan from 2025 to 2027, with year-on-year growth rates of +11.5%, +16.0%, and +19.2% respectively [3] - The expected net profits for the same period are 414 million, 476 million, and 575 million yuan, with growth rates of +6.7%, +14.9%, and +20.7% respectively [3] - The current stock price corresponds to PE ratios of 29X, 25X, and 21X for the years 2025, 2026, and 2027 [3] Rating - The company maintains a "recommended" rating [4]

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company plans to acquire a 51% stake in DeMei Medical, which is expected to become a new growth point in the medical training sector [8] - DeMei Medical is a leading brand in sports medicine in China, with a comprehensive product range covering pre-operative prevention, intra-operative treatment, and post-operative rehabilitation [8] - The acquisition is expected to directly contribute to profit growth, with DeMei Medical's projected net profits for 2026-2028 being 45 million, 55 million, and 65 million yuan, respectively, reflecting growth rates of 28.5%, 22.2%, and 18.2% [8] - The company is well-positioned for international expansion, with a sales network covering over 50 countries and a strong international presence [8] Financial Forecasts - Projected revenue for the company is expected to reach 1.41 billion yuan in 2024, growing to 2.17 billion yuan by 2027, with growth rates of 48.2%, 11.5%, 16.0%, and 19.2% for the respective years [2][9] - The net profit attributable to shareholders is forecasted to be 388 million yuan in 2024, increasing to 575 million yuan by 2027, with growth rates of 27.8%, 6.7%, 14.9%, and 20.7% [2][9] - Earnings per share are projected to rise from 2.01 yuan in 2024 to 2.97 yuan in 2027, with corresponding price-to-earnings ratios decreasing from 31 to 21 [2][9]