Core Viewpoint - The report from Guotai Junan maintains a buy rating for Aikang Medical (01789), indicating that the company's performance in the first half of 2025 met expectations, with potential acceleration in the second half [1] Group 1: Financial Performance - In H1 2025, the company achieved revenue of 694 million yuan, representing a year-on-year increase of 5.6%, and a net profit attributable to shareholders of 161 million yuan, up 15.3%, indicating stable growth against a high base from H1 2024 [2] Group 2: Domestic and International Business Development - The company has made breakthroughs in domestic operations, with the procurement results for artificial joints being implemented across provinces, leading to an increase in market share due to superior product performance and reputation, particularly in high-end hospitals in economically developed regions [3] - The domestic revenue for H1 2025 grew by 6.0% to 566 million yuan, while overseas revenue increased by 4.0% to 128 million yuan, with expectations for acceleration in the second half [3] Group 3: Technological Advancements - The company continues to invest in new technology development, enhancing its competitiveness in the orthopedic field, with over 1,700 clinical surgeries completed using smart-assisted devices by June 2025, and the K3 smart surgical robot approved for market in May 2025 [4] - The company is also improving conventional prosthetics and 3D printing platforms, expanding into sports medicine and biomaterials, which is expected to further enhance its comprehensive competitiveness [4]

Investment Rating - The report maintains a rating of "Buy" for the company [2][10]. Core Views - The company's performance in the first half of 2025 met expectations, and there is potential for acceleration in the second half of the year [2][10]. - The company has achieved steady revenue growth, with a 5.6% year-on-year increase in revenue to 694 million RMB and a 15.3% increase in net profit to 161 million RMB in the first half of 2025 [10]. - The domestic business is making breakthroughs, and overseas exports are continuously expanding, with a 4.0% increase in overseas revenue to 128 million RMB in the first half of 2025 [10]. Financial Summary - Total revenue is projected to grow from 1,100.29 million RMB in 2023 to 2,250.62 million RMB in 2027, reflecting a compound annual growth rate (CAGR) of approximately 20.8% [4]. - Net profit is expected to increase from 182.10 million RMB in 2023 to 499.13 million RMB in 2027, with a CAGR of about 22.4% [4]. - The company's price-to-earnings (PE) ratio is projected to decrease from 32.89 in 2023 to 11.84 in 2027, indicating improving valuation [4]. Market Data - The company's current market capitalization is approximately 6.41 billion HKD, with a stock price range of 3.98 to 7.05 HKD over the past 52 weeks [7][10]. - The target price is set at 7.56 RMB (equivalent to 8.26 HKD) based on a target PE of 21X for 2026 [10].