YIDU TECH (02158) Investor Communication Day: Focus on Order Conversion and Profit Growth, Continuously Strengthening Shareholder Returns

On August 13, YIDU TECH (02158) held an Investor Day. Investors from various brokerage firms, including Goldman Sachs, Citigroup, CITIC SEC, China Securities Co., Ltd., HSBC, GF SEC, as well as several buy-side institutions like Efangda and Boyu Investment, attended the event. Senior management, including co-founder and CEO Xu Jiming and CFO Feng Xiaoying, participated in discussions, addressing key market concerns about order growth, sustained profitability, the commercialization progress of medical AI, and shareholder returns. The management indicated that FY26 represents a significant turning point in YIDU TECHs development. The company achieved its first annual profit, which is even more notable because this profitability was driven by revenue growth, improved gross margins, and enhanced operational efficiency. This marks the transition of YIDU TECH from a long-term "capacity investment period" to a "commercialization realization period." The commercialization phase for AI products has entered a release period, with sustained momentum in order growth. Orders and the progress of AI commercialization were among the main concerns of the investors. Management stated that hospitals are accelerating their upgrade from traditional project-based models to productization, platformization, and intelligent systems. The penetration of AI-native products such as Doctor Copilot, Medical AI platform, and Yidu Zhixun in hospitals is continually increasing. In the previous fiscal year, the company deployed AI platforms in over 50 large hospitals across the country, with some hospitals simultaneously deploying the Copilot platform, and a number of trial-validated projects are gradually entering the bidding and procurement stage. Meanwhile, new orders and on-hand orders for the AI for Life Sciences business are gradually being released. Leveraging data processing technology and AI capabilities, the company has extended its business into clinical trial protocol design, patient recruitment, and intelligent quality control. Nearly 100 research hospitals in China have already deployed related intelligent GCP platforms. The management introduced that in certain clinical research scenarios, AI can enhance patient recruitment speed by at least 30%-50%. Xu Jiming indicated that the company will not solely rely on low prices to secure projects but will continue to focus on key disease areas, facilitating further integration of hospital data infrastructure, disease intelligence, and clinical research capabilities. This will enhance project execution efficiency and customer value through productization and AI integration. From turning losses to steady acceleration, sustained profitability has become the core focus for the next phase. In FY2026, YIDU TECH achieved revenues of approximately 820 million yuan, an increase of about 15% year-on-year; annual net profit was nearly 80 million yuan, with net profit attributable to the parent company at about 73 million yuan, both surpassing the previous upper limit of earnings guidance. Adjusted EBITDA reached 220 million yuan, 5.6 times that of the same period last year, while the overall gross margin rose from 33.5% to 36.4%. Cash flow and operational efficiency have also improved. In the second half of the year, the net cash flow from operating activities turned positive, recording 29.3 million yuan, with a significant increase in net working capital turnover efficiency. The management noted that improvements came from enhanced product capability and optimized payment management, as well as the ongoing application of AI in research and development, delivery, and internal management processes, further boosting labor efficiency and cost-effectiveness. For FY2027, management clearly stated that the company is not entering a slow and stable period post-profitability but rather a stable growth period supported by profit. Future growth will mainly come from three aspects: continued revenue contribution from AI-native products on the hospital side, gradual release of orders in AI for Life Sciences, and steady growth in AI for Care scenarios such as health insurance and chronic disease management. As the proportion of high-margin AI products increases, along with the decline in marginal costs brought by the scaled replication of benchmark products, the company will continue to drive steady improvement in revenue, gross margin, and profit levels. Adequate cash reserves support research and development investment and shareholder returns. In addition to business growth, fund allocation and shareholder return are also important topics of interest in this institutional communication. As of the end of FY2026, the company had approximately 3.3 billion yuan in net cash. Ample cash reserves provide a solid foundation for continued R&D investment, business expansion, and shareholder returns. Management indicated that the company will continue to adhere to a prudent capital allocation principle, focusing investments on R&D that strengthens core competitiveness and on investment and acquisition opportunities that have clear synergistic value with existing businesses. Meanwhile, the company continues to strengthen shareholder returns. Previously, it proposed for the first time to distribute a final dividend and has been actively conducting share buybacks. From 2026 to date, approximately 42.69 million shares have been repurchased, with current treasury shares accounting for nearly 5% of the companys total share capital, which is relatively high among peers. Management stated that in the future, they will continue to prudently pursue capital allocation within a compliant framework, considering the companys operational situation, long-term development needs, and market valuations, and enhance long-term shareholder returns through business growth, dividends, and share buybacks. In the face of increasing competition in medical AI, YIDU TECH stated that medical AI is a "big variable," but also a "slow variable." Rather than pursuing traffic and application count, YIDU TECH will continue to focus on the accuracy, professional depth, and clinical value of disease decision-making, continuously validating products through top hospitals, leading specialties, and leading experts, and then replicating these in broader medical scenarios. In summary at the communication meeting, the management pointed out that FY2026 has validated YIDU TECHs path from years of capability accumulation to the realization of commercial value. In the next phase, the company will continue to focus on order conversion, AI product penetration, gross margin enhancement, profit growth, and improvement of operating cash flow, promoting the transition of medical AI from validated benchmark scenarios to larger-scale commercialization, thereby rewarding investors long-term trust with sustained, high-quality operational growth.