Pacific Securities: Maintain "Buy" rating on UNI MEDICAL with a target price of HKD 7.97

According to the Zhitong Finance APP, Pacific Securities has released a research report maintaining a "Buy" rating for UNI MEDICAL (02666). It is expected that the company's operating revenue for 2025-2027 will be 14.723 billion, 15.343 billion, and 16.254 billion yuan, with net profit attributable to the parent company at 2.118 billion, 2.228 billion, and 2.366 billion yuan, and EPS at 1.12, 1.18, and 1.25 yuan, corresponding to a PE valuation of 4.99, 4.75, and 4.47 times based on the closing price on October 29. The report is optimistic about the valuation increase brought by the rapid growth of the company's healthcare business, giving a PE valuation of 6.5 times for 2025, corresponding to a target price of HKD 7.97. The company's healthcare business has become the core growth engine, while the financial business remains stable with significant risk control effectiveness, and the synergy between the two business segments continues to solidify the company's value.

Event: UNI MEDICAL released its semi-annual report for 2025. During the reporting period, the company achieved revenue of 7.581 billion yuan, a year-on-year increase of 15.9%; net profit for the period was 1.335 billion yuan, a year-on-year increase of 6.6%; profit attributable to ordinary shareholders was 1.228 billion yuan, a year-on-year increase of 8.0%.

The main points of Pacific Securities are as follows:

The company's operating performance continues to show steady growth

As of H1 2025, the company's basic earnings per share were 0.65 yuan, a year-on-year increase of 8.0%; return on equity was 14.08%, and return on total assets was 3.11%. In terms of revenue structure, the healthcare business achieved revenue of 4.964 billion yuan in H1 2025, accounting for 65.5% of total revenue, a year-on-year increase of 27.7%, becoming the core growth engine; among them, the health technology segment grew by 142.1%, becoming the most promising sub-sector. The financial business achieved revenue of 2.851 billion yuan, accounting for 37.6% of total revenue, a year-on-year increase of 6.9%. In terms of asset quality, the financial business had net interest-earning assets of 70.605 billion yuan, a non-performing loan ratio of 0.97%, and a provision coverage ratio of 313.87%, indicating sufficient risk resistance capability.

The healthcare business drives high growth through multi-field synergy

As the core growth segment, it achieved revenue of 4.964 billion yuan in H1 2025, a year-on-year increase of 27.7%, covering three major areas: 1) Comprehensive medical care with 65 consolidated hospitals (including 5 Class A hospitals), over 16,000 open beds, and 5.09 million patient visits (a year-on-year increase of 2.8%). Although affected by medical insurance payment reforms and the impact of new infrastructure, the segment's profit decreased by 14.6% year-on-year to 231 million yuan, but the company actively responded through drug cost optimization and improved operational efficiency; 2) Specialized medical care acquired Shandong University of Traditional Chinese Medicine Affiliated Eye Hospital in the first half of 2025, while promoting rehabilitation and oncology specialty construction; 3) Health technology revenue reached 646 million yuan, a year-on-year increase of 142.1%, with equipment full-cycle management services covering over 1,600 institutions (managing assets of 37 billion yuan), and smart health and elderly care services covering 182 districts and counties, with a stock of elderly care clients reaching 4,958.

The financial business focuses on medical scenarios with significant risk control effectiveness

Focusing on medical financing leasing, it achieved revenue of 2.851 billion yuan in H1 2025, a year-on-year increase of 6.9%. During the reporting period, the financial business's funding focus was on the medical field, prioritizing support for the equipment updates of consolidated medical institutions and the construction of health technology business client projects; At the same time, we innovatively launched the "financing lease + full-cycle management of medical equipment" combined service model to enhance customer cooperation stickiness. In terms of risk control, as of H1 2025, the non-performing asset ratio of interest-earning assets was 0.97%, a decrease of 2 basis points from the beginning of the year; the provision coverage ratio was 313.87%, an increase of 12.01 percentage points from the beginning of the year; the average cost rate of interest-bearing liabilities was 3.40%, a year-on-year decrease of 44 basis points, with risk resistance capability and cost control capability enhanced simultaneously.

Risk Warning: Macroeconomic recovery is less than expected, industry competition has significantly intensified, and asset quality has deteriorated significantly