Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, with a focus on domestic market challenges and strong overseas growth opportunities [1][2][3][4]. Domestic Market Performance - The domestic market is under pressure due to policy impacts, but large-scale installations are ongoing, laying a foundation for long-term growth. In H1 2025, domestic revenue was 1.229 billion yuan, down 12.81% year-on-year, with reagent revenue decreasing by 18.96% and instrument revenue increasing by 18.18% [2]. - The company completed the installation of 774 units, with large machines accounting for 74.81% and coverage rates for tertiary hospitals at 47.6% and for top-tier hospitals at 63.5% [2]. Overseas Market Performance - The overseas market showed strong growth, with revenue reaching 0.952 billion yuan, up 19.57% year-on-year. The reagent business grew by 36.86% due to increased installation volumes, with 1,971 units sold, and high-end models making up 77.02% of sales [3]. Financial Performance and Profitability - The company increased its sales and R&D investments, leading to temporary pressure on profits due to a higher proportion of low-margin products. The overall gross margin decreased to 68.44%, down 4.17 percentage points, and the net profit margin fell to 35.29%, down 5.56 percentage points [4]. - The company expects revenue for 2025-2027 to be 4.888 billion, 5.625 billion, and 6.477 billion yuan, with year-on-year growth rates of 7.78%, 15.07%, and 15.16%, respectively. Net profits are projected to be 1.866 billion, 2.183 billion, and 2.571 billion yuan, with corresponding growth rates of 2.06%, 16.98%, and 17.79% [4].

Investment Rating - The investment rating for the company is "Outperform the Market" [6][4][27] Core Views - The company's overseas business has become a core growth driver, with a significant increase in instrument installations and reagent sales [2][4][19] - Revenue for 2024 is projected to grow by 15.4% to 45.35 billion, with a net profit of 18.28 billion, reflecting a 10.6% increase [10][4] - The company has successfully launched its T8 automated laboratory line, achieving 87 installations in its first year, indicating a strong market entry [19][24] Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 45.35 billion (+15.4%) and a net profit of 18.28 billion (+10.6%), with a fourth-quarter revenue of 11.21 billion (+9.7%) [10][4] - The gross profit margin for 2024 was 72.07%, slightly down by 0.89 percentage points, primarily due to changes in product mix [20][3] - The company expects net profits for 2025-2027 to be 20.37 billion, 24.31 billion, and 28.84 billion respectively, with growth rates of 11.4%, 19.4%, and 18.6% [4][5] Business Segments - Domestic revenue for 2024 is projected at 28.43 billion (+9.32%), with reagent sales growing by 9.87% [2][16] - Overseas revenue is expected to reach 16.84 billion (+27.67%), driven by increased instrument installations and reagent sales [2][16] - The company has established subsidiaries in key markets such as Indonesia, Malaysia, Thailand, and Korea, enhancing its international presence [19][2] Cost and Profitability - The sales expense ratio for 2024 is 15.76%, while the R&D expense ratio is 10.00%, indicating stable cost management [20][3] - The net profit margin remains strong at 40.32%, despite a slight decrease of 1.77 percentage points [20][3] - The company anticipates a decline in gross margin to 68.01% in Q1 2025, primarily due to a decrease in the proportion of reagent sales [20][3] Product Development - The company has launched new high-throughput instruments, including the X10 and C10, to enhance its product matrix [24][19] - In 2024, the company registered 40 new reagent certificates, expanding its product offerings in various diagnostic fields [24][19] - The T8 automated line's successful market entry positions the company as a comprehensive laboratory solution provider [19][24]