Summary of United Imaging Earnings Review Company Overview - **Company**: United Imaging (688271.SS) - **Industry**: Medical Imaging Equipment - **Market Presence**: Leading manufacturer in China with expansion to over 80 countries worldwide Key Financial Results - **1H25 Revenue**: Rmb6,016 million, representing a **13% year-over-year (yoy)** increase [1] - **1H25 Net Profit**: Rmb998 million, reflecting a **5% yoy** growth [1] - **China Growth**: Notably, growth in China for 1H25 was **11% yoy**, with an estimated **22% yoy** growth in 2Q25 [1] Revenue Breakdown - **Product Lines Performance**: - **MRI**: +17% yoy - **MI (PET-CT and PET-MR)**: +13% yoy - **XR (DR and DSA)**: +26% yoy - **RT**: Flat at -0.05% yoy - **CT Scanners**: Declined by -6% yoy due to VBP-driven price cuts [2] - **Geographical Performance**: - **China**: Revenue growth of **11% yoy** in 1H25, exceeding expectations - **Overseas**: Growth of **22% yoy** in 1H25, but below forecasts; Europe and North America showed strong growth at **94%** and **67% yoy**, respectively [2] - **Revenue Type**: - **Recurring Revenue**: Grew by **32% yoy**, indicating a shift towards service-related revenue [2] Future Outlook - **VBP Impact**: Management expects continued VBP at provincial levels, with minimal nationwide impact in the near term [6] - **Trade-in Stimulus**: A new round of trade-in stimulus has been launched, although applications for support have declined significantly compared to last year [6] - **Ultrasound Product Line**: Development ongoing, with commercialization expected to be delayed until 2026 [6] - **Photon-Counting CT**: Recently received marketing approval, expected to be a medium to long-term revenue accelerator [6] Earnings Forecast Adjustments - **Near-term Earnings**: Lowered due to VBP headwinds and ultrasound product delays - **Long-term Earnings**: Increased outlook based on confidence in sales growth [6] Investment Thesis - **Market Share Growth**: Medical equipment procurement in China is rebounding with government support, leading to increased market share for United Imaging [9] - **Service Revenue Growth**: Anticipated rise in service-related revenue will improve gross profit margins [9] - **Valuation**: Currently trading near median P/E multiple since listing, with significant long-term growth potential [9] Price Target and Risks - **New Price Target**: Rmb174, revised from Rmb173, with a **22.7% upside** from current price of Rmb141.8 [7][11] - **Key Risks**: - Chip supply chain disruptions - Raw material risks, particularly helium - Macroeconomic downturns in China - Potential VBP risks [10] Conclusion United Imaging demonstrates strong growth in revenue and profit, particularly in the Chinese market, with a positive outlook for long-term growth driven by service revenue and new product launches. However, potential risks related to supply chains and pricing policies remain critical considerations for investors.