Guotai Haitong: Maintains "buy" rating on AK MEDICAL (01789) with a target price of HK$8.26.

Guotai Haitong released a research report stating that it maintains a hold rating for AK MEDICAL (01789). The company's first half performance meets expectations, and is expected to accelerate in the second half of the year. Taking into account industry conditions and the company's business development, the forecasted EPS for 2025-2027 has been slightly lowered to 0.30/0.36/0.44 yuan (previously 0.31/0.39/0.48 yuan). Based on the valuation of comparable companies, a target PE of 21X for 2026 is given, with a target price of 7.56 yuan (equivalent to 8.26 Hong Kong dollars). Guotai Haitong's main points are as follows: Stable growth in 2025H1 performance, meeting expectations The company achieved revenue of 694 million yuan in 2025H1 (up 5.6% year-on-year, the same below), and net profit attributable to shareholders was 161 million yuan (up 15.3%). The performance showed steady growth on the high base formed by the improvement in the hospital environment in the first half of 2024, meeting expectations. Continuous breakthrough in domestic business, continuous expansion of overseas export business In 2025H1, the results of the selection of provincial procurement of artificial joint products have been implemented in various provinces, with import substitution accelerating. With leading product performance and market reputation, the implant ratio continues to rise. Breakthrough progress has been made in clinical applications in high-end hospitals, especially in economically developed regions such as the Yangtze River Delta and the Pearl River Delta, where key tertiary hospitals with imports as the mainstay have achieved scale sales of the company's products. The proportion of surgeries continues to increase, breaking the long-term dominance of imported brands in the market. The spine business is under pressure due to policy impacts, while the digital orthopedic customization business remains stable. The overall domestic revenue in 2025H1 increased by 6.0% year-on-year to 566 million yuan. The overseas business continues to expand, with 4 new countries registered in 2025H1 and 15 countries in the registration and approval process, with overseas revenue increasing by 4.0% year-on-year to 128 million yuan in 2025H1, with expectations of acceleration in the second half of the year. Continued investment in new technology research and development, constantly strengthening competitiveness in the orthopedic field The company continues to strengthen its digital orthopedic layout. As of the end of June 2025, the company's intelligent assistive device has completed over 1,700 clinical surgeries. The company's independently developed K3 intelligent surgery Siasun Robot & Automation was approved for listing in May 2025 and has achieved one commercial launch by the end of August. The company has also further iterated and improved conventional prostheses and 3D printing platforms, positioning in sports medicine, small joints of limbs, and bio-materials, with the comprehensive competitiveness expected to further enhance. Risk warning: Surgeries growth may not meet expectations, increasing competition.