Core Viewpoint - The report from Zhongyou Securities indicates that Kefu Medical achieved a net profit attributable to the parent company of 167 million yuan in the first half of 2025, representing a year-on-year decline of 9.51% [1] Financial Performance - In H1 2025, the company implemented strategic adjustments to low-efficiency product categories and models, resulting in a gross profit margin increase of 1.8 percentage points year-on-year [1] - The core product categories showed strong growth momentum, with significant sales acceleration starting in the second quarter for self-developed ventilators [1] Product Development - Key products such as the blood glucose and uric acid integrated machine, pre-heating thermometers, and home test strips also exhibited good development momentum [1] - Continuous product iteration and channel optimization have further solidified the market position and competitive advantage of core categories, laying a solid foundation for future performance growth [1] Business Expansion - The hearing aid business has been continuously developing, with revenue growth exceeding 20% year-on-year in H1 2025 [1] - The company plans to accelerate the implementation of its digital strategy, fully utilizing a new generation retail management system to drive marketing strategy formulation, product structure adjustments, and inventory turnover management [1] Future Outlook - With the increasing proportion of old stores in the hearing aid business, there is potential for this segment to gradually turn profitable, which may become the company's second growth curve [1]

Performance Review - In H1 2025, the company achieved operating revenue of 1.496 billion, a year-on-year decrease of 4.03% [1] - The net profit attributable to the parent company was 167 million, down 9.51% year-on-year [1] - The net profit attributable to the parent company after deducting non-recurring gains and losses was 136 million, a decline of 17.98% year-on-year [1] - The company implemented strategic adjustments to low-efficiency product categories, resulting in a gross margin increase of 1.8 percentage points [1] - Revenue breakdown: Rehabilitation aids contributed 563 million (37.63%), medical care products 424 million (28.32%), and health monitoring products 271 million (18.11%) [1] Growth Potential - Certain core product categories showed strong growth momentum in H1 2025 [1] - Sales of self-developed ventilators increased significantly starting in Q2, along with good performance from blood glucose and uric acid integrated machines, pre-heating thermometers, and home testing strips [1] - Continuous product iteration and channel optimization have strengthened the market position and competitive advantage of core categories, laying a solid foundation for future revenue growth [1] Hearing Aid Business Development - The hearing aid business saw over 20% year-on-year revenue growth in H1 2025 [2] - The company plans to accelerate the implementation of its digital strategy, utilizing a new retail management system to enhance marketing strategies, product structure adjustments, and inventory turnover management [2] - As the proportion of older stores increases, the hearing aid business is expected to gradually turn profitable, potentially becoming the company's second growth curve [2] Profit Forecast - Revenue projections for 2025-2027 are 3.325 billion, 3.794 billion, and 4.316 billion, with year-on-year growth rates of 11.48%, 14.09%, and 13.77% respectively [3] - Expected net profit attributable to the parent company for the same period is 380 million, 466 million, and 548 million, with year-on-year growth rates of 21.79%, 22.63%, and 17.75% respectively [3] - Price-to-earnings ratios for 2025-2027 are projected at 22x, 18x, and 15x, with corresponding PEG ratios of 1.02, 0.80, and 0.87 [3]

Investment Rating - The investment rating for the company is "Buy" [10][15] Core Insights - The company reported a revenue of 1.496 billion yuan in H1 2025, a year-on-year decrease of 4.03%, and a net profit attributable to the parent company of 167 million yuan, down 9.51% year-on-year [4] - Strategic adjustments were made to low-efficiency product categories, resulting in a gross margin increase of 1.8 percentage points [5] - Core product categories showed strong growth momentum, with significant sales increases in self-developed respiratory machines and other key products [6] - The hearing aid business is expected to gradually turn profitable, with a revenue growth of over 20% in H1 2025, indicating the emergence of a second growth curve for the company [7] Financial Performance - Revenue projections for 2025-2027 are 3.325 billion yuan, 3.794 billion yuan, and 4.316 billion yuan, with year-on-year growth rates of 11.48%, 14.09%, and 13.77% respectively [8] - Net profit attributable to the parent company is expected to be 380 million yuan, 466 million yuan, and 548 million yuan for the same period, with growth rates of 21.79%, 22.63%, and 17.75% respectively [8] - The company’s PE ratios for 2025-2027 are projected to be 22 times, 18 times, and 15 times, with corresponding PEG ratios of 1.02, 0.80, and 0.87 [8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Viewpoints - The company reported a revenue of 1.496 billion yuan for the first half of 2025, a year-on-year decrease of 4.03%, with a net profit attributable to shareholders of 167 million yuan, down 9.51% year-on-year [4][5] - The second quarter of 2025 saw a revenue of 758 million yuan, a year-on-year increase of 0.87%, while the net profit attributable to shareholders was 76 million yuan, down 9.30% year-on-year [5] - The overall gross margin improved to 52.80% in Q2 2025, indicating effective product structure optimization [5] Revenue and Profit Analysis - The rehabilitation aids segment is the largest business area, generating 563 million yuan in revenue for H1 2025, a decrease of 6.41% year-on-year, primarily due to the streamlining of inefficient SKUs [5] - The medical care product segment achieved revenue of 424 million yuan, up 9.67% year-on-year, mainly due to the acquisition of Huazhou [5] - Health monitoring products generated 271 million yuan in revenue, a year-on-year increase of 12.89%, driven by strong sales of thermometers and home testing strips [5] Online and Overseas Market Performance - Online channels contributed 974 million yuan in revenue for H1 2025, a year-on-year increase of 3%, accounting for 67.28% of total operating income [6] - The company has implemented differentiated operational strategies for various e-commerce platforms, enhancing customer retention and repurchase rates through a refined membership system [6] - The overseas business performed exceptionally well, with revenue exceeding 100 million yuan, a year-on-year growth of over 200% [6] Strategic Acquisitions - In January 2025, the company completed the acquisition of Shanghai Huazhou, a leading domestic pressure-sensitive adhesive manufacturer, which will enhance its product line and support overseas market expansion [8] - In June 2025, the company acquired a controlling stake in Ximan Medical Systems, a well-known medical instrument retailer in Hong Kong, facilitating entry into the Hong Kong market and resource integration [8] Financial Forecast - Revenue projections for 2025-2027 are 3.58 billion yuan, 4.33 billion yuan, and 5.24 billion yuan, with growth rates of 20.0%, 21.0%, and 20.8% respectively [9] - Net profit attributable to shareholders is expected to reach 414 million yuan, 504 million yuan, and 613 million yuan for the same period, with growth rates of 32.7%, 21.8%, and 21.7% respectively [9] - The estimated EPS for 2025-2027 is 1.98 yuan, 2.41 yuan, and 2.93 yuan, corresponding to P/E ratios of 20x, 17x, and 14x [9]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's performance in H1 2025 met expectations, with revenue of 1.496 billion yuan (down 4.03% year-on-year) and a net profit of 167 million yuan (down 9.51% year-on-year). Q2 revenue was 758 million yuan (up 0.87% year-on-year) and net profit was 76 million yuan (down 9.30% year-on-year) [4] - The company has seen a significant increase in overseas revenue, which reached 97 million yuan (up 208.97% year-on-year), following acquisitions that enhanced its overseas channels and customer resources. The company is also planning to list on the Hong Kong Stock Exchange to further boost its overseas business expansion capabilities [4] - The company is focusing on optimizing its product categories and increasing the proportion of self-developed products, which has improved its profitability. The gross profit margin for H1 2025 was 52.49% (up 1.82 percentage points) [4] Financial Summary - For 2025, the company is projected to achieve a net profit of 376 million yuan, with earnings per share (EPS) of 1.80 yuan. The price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are expected to be 22.9, 18.1, and 14.2 respectively [4][6] - The company plans to distribute a dividend of 122 million yuan in mid-2025, indicating a commitment to returning value to shareholders [6] - The company has a strong focus on the home medical device sector, benefiting from the aging population and increasing demand for healthcare products. The revenue from hearing aids has grown over 20% year-on-year in H1 2025 [6]

Core Insights - The company, Kewei Medical, reported a revenue of 1.496 billion yuan and a net profit of 167 million yuan for the first half of 2025, with a proposed cash dividend of 6 yuan per 10 shares, totaling 122 million yuan [1] - R&D and innovation are identified as the long-term growth engines for Kewei Medical, with over a hundred new products launched annually based on market feedback [1] - The company has seen significant sales growth in its core product categories, particularly in respiratory devices and a blood glucose and uric acid testing machine, which leads the market in its segment [1] Financial Performance - Kewei Medical achieved a revenue of 1.496 billion yuan and a net profit of 167 million yuan in the first half of 2025 [1] - The company plans to distribute a cash dividend of 122 million yuan, reflecting its strong financial position [1] Product Innovation - The respiratory machine's sales surged in Q2 due to enhanced noise reduction and intervention accuracy, ranking first in sales on Douyin [1] - The innovative blood glucose and uric acid testing device requires only one test strip and a drop of blood for simultaneous measurement, maintaining a leading position in its niche [1] - Other products like infrared thermometers and home testing strips also showed steady growth [1] Smart Technology Integration - Kewei Medical is integrating "IoT + AI" into its products and services, including remote monitoring and personalized health management through a cloud platform [2] - The company is developing a smart health management ecosystem with various projects like smart blood pressure monitors and oxygen machines [2] Sales Channels - Online sales accounted for nearly 1 billion yuan, representing 65% of total revenue, with a strong presence on platforms like Tmall and JD [2] - The company is expanding its presence on interest-based e-commerce platforms like Douyin and Kuaishou to drive growth [2] - Offline sales reached nearly 500 million yuan, with a 12.5% year-on-year increase, and the hearing aid brand "Jianer Hearing" saw over 20% revenue growth [2] Global Expansion - Kewei Medical is accelerating its global strategy, with overseas revenue nearing 100 million yuan, a growth of over 200% [3] - The company completed two significant acquisitions to enhance its international market penetration [3] - A plan for a Hong Kong listing has been initiated to boost international market recognition and support its global strategy [3] Competitive Advantage - Analysts note that Kewei Medical is forming a differentiated competitive advantage through core product innovation, multi-channel collaboration, and deepening overseas market presence [3]

Key Points Summary of Kefu Medical Conference Call Company Overview - **Company**: Kefu Medical - **Industry**: Medical Devices and Healthcare Financial Performance - **H1 2025 Revenue**: 1.451 billion CNY, up 14.5% YoY [2] - **Net Profit**: 166 million CNY, down 9.5% YoY [3] - **Cash Flow**: Operating cash flow of 351 million CNY, up 14.5% YoY [3] - **Dividend**: Proposed cash dividend of 6 CNY per 10 shares, totaling 120 million CNY [3] Revenue Breakdown by Segment - **Health Monitoring**: 270 million CNY, up 12% [4] - **Medical Care**: 420 million CNY, up 9.2% [4] - **Rehabilitation Aids**: 560 million CNY, down 6.5% [4] - **Respiratory Support**: 100 million CNY, down 43.3% [4] - **Traditional Chinese Medicine Therapy**: 90 million CNY, up 6% [4] Growth Expectations - **Full Year Revenue Growth**: Expected to exceed 10% [2] - **Q3 Revenue Forecast**: Approximately 850 million CNY, up over 20% YoY [11] - **Q4 Revenue Forecast**: Expected to exceed 900 million CNY, up over 20% YoY [11] - **Segment Growth Projections**: - Rehabilitation Aids and Medical Care: ~10% growth - Health Monitoring: ~16% growth - Respiratory Support: Recovery to ~8% growth - Traditional Chinese Medicine: 10%-15% growth [12] Online and Offline Sales Channels - **Online Revenue**: 970 million CNY, 65% of total revenue [6] - **Offline Revenue**: 470 million CNY, 31% of total revenue [6] - **Sales Platforms**: Major online sales through Tmall, JD, and Douyin [6] International Expansion - **Overseas Revenue**: Approximately 100 million CNY in H1 2025, significant growth [8] - **Acquisitions**: Completed acquisitions of Shanghai Huazhou and Hong Kong Ximanla to enhance market presence in Europe and Hong Kong [8] - **Future Expectations**: Anticipated overseas revenue to exceed 300 million CNY in H2 2025 [18] Product Innovation and Development - **AI and Digitalization**: Focus on integrating AI in health monitoring devices [5][20] - **New Product Launches**: Introduction of innovative products like bone conduction hearing aids and electric wheelchairs [7] - **R&D Investment**: 40 million CNY in R&D, with a focus on improving product performance and user experience [28] Challenges and Risks - **Respiratory Support Losses**: Losses attributed to market demand fluctuations and cost control issues [16] - **Sales Expenses**: Sales expense ratio at 32%, with significant investment in hearing aid business [28] Strategic Focus - **Core Product Strategy**: Core products contribute over 80% of total revenue, with plans to develop more high-revenue products [22] - **Market Positioning**: Emphasis on enhancing brand influence and market share through product innovation and strategic acquisitions [32] Conclusion - **Overall Outlook**: Kefu Medical is positioned for growth with a focus on innovation, international expansion, and improving operational efficiency, despite facing challenges in certain segments. The company aims to leverage its strengths in AI and digital health to enhance its product offerings and market presence.

Core Viewpoint - Company plans to issue H-shares and apply for listing on the Hong Kong Stock Exchange to enhance its global strategy and brand recognition [2] Group 1: Company Overview - Company is a leading enterprise in personal health management, specializing in the research, production, sales, and service of medical devices [4] - As of the end of 2024, the company has 92 subsidiaries and 794 branches, establishing a comprehensive network for research, production, marketing, and service [4] - Product offerings span five major areas: health monitoring, rehabilitation aids, respiratory support, medical care, and traditional Chinese medicine therapy [4] Group 2: Internationalization Strategy - Company views internationalization as a key strategic direction, combining organic growth with mergers and acquisitions to enhance overseas business [4] - Significant investments are being made in overseas operations, focusing on local product development and market registration [4] - Recent acquisitions include Shanghai Huazhou and Ximaner, aimed at strengthening overseas resources and market presence [5] Group 3: Financial Performance - In 2024, the company achieved revenue of 2.983 billion yuan, a year-on-year increase of 4.53%, and a net profit of 312 million yuan, up 22.60% [8] - Overseas revenue remains small, accounting for approximately 59.15 million yuan, or 1.98% of total revenue [8] - In Q1 2025, the company experienced a decline in performance, with revenue of 738 million yuan, down 8.59%, and net profit of 91.43 million yuan, down 9.68% [8] Group 4: Product Performance - In Q2, the company reported stable overall operations with strong demand for certain products, including hearing aids and home testing kits [9] - The self-developed respiratory machine has shown outstanding performance, achieving industry-leading noise reduction [9] - The blood glucose and uric acid testing device, utilizing a unique dual-testing technology, continues to lead in its niche market [9]

Group 1: Company Performance - The overall operating status in Q2 remained stable, with strong growth in hearing aids, home testing reagents, dressings, and adult care products [2] - The self-developed ventilator achieved outstanding performance, ranking first in sales on Douyin, with industry-leading noise reduction and performance [3] - The blood glucose and uric acid integrated machine showcases a unique dual-testing technology, reducing user burden and medical costs [3] Group 2: Hong Kong Listing Rationale - The current national policy supports companies "going global," making the Hong Kong listing aligned with policy direction and beneficial for international development [4] - The Hong Kong market offers a high degree of internationalization, providing a quality financing platform for companies [4] - Establishing an H-share platform is a strategic move to enhance overseas business capabilities and improve cross-border M&A efficiency [4] Group 3: International Business Strategy - The company aims for internationalization through a combination of organic growth and acquisitions, continuously enhancing its overseas business layout [5] - Significant investments are being made in overseas markets, with local product development and registration efforts underway [5] - The company completed acquisitions of Huazhou and Ximan in the first half of the year, enhancing overseas business resources [5] Group 4: Acquisition Projects - Huazhou, established in 2002, is a leading manufacturer of pressure-sensitive adhesive products, with over 60% of its revenue from overseas [6] - Ximan, with nearly 40 years of experience, operates retail medical device centers and will help the company penetrate the Hong Kong market [7] - Future acquisitions will focus on companies that can enhance product lines or technical capabilities and those with established distribution networks or brand influence [7] Group 5: Hearing Aid Business Outlook - The hearing aid business is focused on improving operational quality and has seen some improvement in profitability [7] - The Chinese hearing aid market has significant growth potential but faces challenges such as low public awareness and usage rates [7] - The company plans to provide comprehensive services for hearing-impaired individuals, leveraging its core competitive advantage in personalized solutions [7]