Cathay Securities and Haitong Securities: Maintain AK MEDICAL's "Buy" rating with a target price of HKD 8.26
CITIC Securities maintains a buy rating on AK MEDICAL, with a target price of HKD 8.26. In the first half of 2025, AK MEDICAL achieved revenue of 694 million yuan, a year-on-year increase of 5.6%, and a net profit attributable to the parent company of 161 million yuan, a year-on-year increase of 15.3%. Overseas revenue grew by 4.0% year-on-year to 128 million yuan, and is expected to accelerate in the second half of the year. The company continues to make breakthroughs in the domestic market, especially in clinical applications in high-end hospitals. The spinal business is affected by policies, while the digital orthopedic business remains stable
According to the Zhitong Finance APP, Guotai Junan has released a research report stating that it maintains an "Overweight" rating for AK MEDICAL (01789). The company's performance in the first half of the year met expectations, and it is expected to accelerate in the second half. Considering the industry situation and the company's business development, the forecast EPS for 2025-2027 has been slightly adjusted to 0.30/0.36/0.44 yuan (previously 0.31/0.39/0.48 yuan). Based on comparable company valuations, a target PE of 21X for 2026 is given, resulting in a target price of 7.56 yuan (equivalent to 8.26 HKD).
The main points from Guotai Junan are as follows:
Steady growth in 2025H1 performance, meeting expectations
In 2025H1, the company achieved revenue of 694 million yuan (YoY +5.6%), with a net profit attributable to the parent company of 161 million yuan (+15.3%). This represents steady growth against a high base formed by the improved hospital environment in 2024H1, and the performance met expectations.
Domestic business continues to break through, overseas export business continues to expand
In 2025H1, the results of the national procurement for artificial joints were implemented in various provinces, accelerating import substitution. The company, leveraging its leading product performance and market reputation, has seen a continuous increase in the proportion of implants. It has made breakthrough progress in clinical applications in high-end hospitals, especially in key tertiary hospitals in economically developed regions such as the Yangtze River Delta and the Pearl River Delta, where the company's products have achieved scaled sales, and the proportion of surgical volume continues to rise, breaking the long-standing market dominance of imported brands. The spinal business has been under pressure due to policy impacts, while the digital orthopedic customized business remains stable. The overall domestic revenue in 2025H1 grew by 6.0% YoY to 566 million yuan. The overseas business continues to expand, with 4 new registrations in 2025H1 and 15 countries currently undergoing registration approval. Overseas revenue in 2025H1 grew by 4.0% YoY to 128 million yuan, and acceleration is expected in the second half of the year.
Continuous investment in new technology research and development, enhancing competitiveness in the orthopedic field
The company continues to strengthen its digital orthopedic layout. As of the end of June 2025, the cumulative number of clinical surgeries completed with its intelligent auxiliary devices has exceeded 1,700. The fully self-developed K3 intelligent surgical robot was approved for market launch in May 2025, capable of assisting doctors throughout the entire process before, during, and after surgery, with one commercialized unit achieved by the end of August. The company is also further iterating and improving conventional prosthetics and the 3D printing platform, laying out sports medicine for small joints and biomaterials, which is expected to further enhance its comprehensive competitiveness.
Risk Warning: Surgical volume growth may be less than expected, and competition may intensify
