AK MEDICAL (01789) reported its 2025 interim results, achieving revenue of RMB 694 million (+5.60% YoY) and net profit attributable to shareholders of RMB 161 million (+15.3% YoY). Capital Securities initiated coverage with a "Buy" rating, projecting the company's revenue for 2025–2027 to reach RMB 1.512 billion, RMB 1.751 billion, and RMB 2.027 billion, respectively, with net profits of RMB 330 million, RMB 391 million, and RMB 463 million.
In H1 2025, joint procurement policies were implemented nationwide, with AK MEDICAL securing a top-tier position in contract renewals, seeing a 10% increase in procurement volume compared to the first round. Post-initial procurement, the company rapidly expanded coverage in national and provincial hospitals, achieving over 90% penetration in high-tier hospitals. Surgical volumes from these hospitals rose 33% YoY, reflecting growing clinical recognition.
The company is restructuring its sales team to implement a full-coverage strategy across hospital tiers, aiming to further boost market share. Leveraging its iCOS digital orthopedics platform, AK MEDICAL has established a comprehensive lifecycle management system for personalized implants, integrating 3D printing, biomechanics, medical-engineering collaboration, and imaging processing.
From 2022 to 2024, the company launched/obtained approvals for the VTS visual intelligent navigation system, hip and knee surgical robots, with the K3 smart surgical robot approved in H1 2025. Capital Securities believes the integrated "preoperative planning + intraoperative navigation/robotics + implants" solution enhances orthopedic clinical outcomes, with rising equipment installations expected to drive sustained implant sales growth.
Overseas, AK MEDICAL operates under dual brands (JRI and AK) to complement different markets. In 2024 and H1 2025, it secured product registrations in 5 and 4 new countries, respectively, while adding 12 and 5 new distributors. The company continues to promote its digital orthopedics solutions globally, strengthening clinical services. Capital Securities views overseas expansion as a potential new growth driver.