Investment Rating - The report maintains a "Recommended" investment rating for Xinhua Medical (600587) with a target price of 20 yuan [2][7]. Core Views - The company reported a revenue of 4.79 billion yuan for the first half of 2025, a decrease of 7.64% year-on-year, and a net profit attributable to shareholders of 386 million yuan, down 20.35% [2][7]. - The pharmaceutical equipment segment shows steady growth while the company is gradually divesting low-margin businesses [2][7]. - The overall revenue decline is primarily due to reduced income from medical devices and medical trade products [2][7]. - The company is expanding its international market presence, with overseas revenue increasing by 18.69% to 124 million yuan in the first half of 2025 [2][7]. - The gross margin decreased to 25.21%, down 1.44 percentage points, attributed to a lower proportion of high-margin medical device revenue [2][7]. - The company expects net profits for 2025-2027 to be 800 million, 930 million, and 1.03 billion yuan, respectively, with corresponding EPS of 1.32, 1.53, and 1.69 yuan [2][7]. Financial Summary - Total revenue for 2024 is projected at 10.021 billion yuan, with a year-on-year growth rate of 0.1% [2][8]. - The net profit attributable to shareholders is expected to reach 798 million yuan in 2025, reflecting a growth rate of 15.4% [2][8]. - The company’s PE ratio is projected to be 12, 11, and 10 for the years 2025, 2026, and 2027, respectively [2][8].