HYGEIA HEALTH (06078) rose more than 5% before the midday break. As of the time of writing, the stock was up 5.66%, trading at HK$14.73, with a turnover of HK$87.8728 million.

The company recently issued a performance forecast for 2025. Analysis from CITIC Securities points out that in the second half of 2025, the company achieved revenue of RMB 2.01 to 2.06 billion, representing a year-on-year decline of 0% to 3%. Adjusted net profit was approximately RMB 188 to 228 million, fluctuating between a 7% decrease and a 13% increase year-on-year, while operating cash flow grew by 36% to 53% year-on-year. The company's hospitals are relatively evenly distributed nationwide. Revenue growth stabilized in the second half of 2025. Looking ahead to 2026, as the impact of DRG payment reforms on average hospitalization costs diminishes compared to the previous year, the company's overall revenue growth is expected to turn positive.

CLSA believes that although HYGEIA HEALTH issued a profit warning, the downturn in performance has likely bottomed out. Specifically, second-half revenue is projected to decline by 2% year-on-year to approximately RMB 2 billion, while non-IFRS adjusted net profit returned to positive growth of 3%, indicating improving profit resilience. The stabilization of adjusted net profit is a positive signal of enhanced operational execution.

Looking forward to 2026, key growth drivers for HYGEIA HEALTH include expanding revenue from non-national medical insurance catalog items, improving utilization rates of existing hospitals, and reducing the debt-to-asset ratio to drive operating leverage and rebuild profit margins.