Yonghe Medical (02279) announced that the group expects to report a net profit of no less than RMB 70 million for the fiscal year ending December 31, 2025. This represents a significant turnaround from a net loss of RMB 227 million reported for the previous fiscal year ended December 31, 2024. The board of directors attributes this return to profitability to the continued implementation and deepening of several key initiatives, which have not only laid a solid foundation for the current year's profit but also provide strong support for sustainable profit growth in the future.

The profit improvement is primarily due to two factors. First, the ongoing optimization of the business model has enhanced operational efficiency, leading to an expansion in the gross profit margin. The group has intensified its focus on refining its store network layout and optimizing resource allocation, directing core resources to high-potential locations, which has steadily increased the operational efficiency of its clinics. Concurrently, the group has advanced the intelligent upgrade of its self-developed chain medical management system, "Hefan," deeply integrating it with a corporate AI knowledge base engine to create an intelligent solution covering the entire process of diagnosis, treatment, service, and operations. These measures have effectively improved the precision of core business operations in efficiency enhancement, quality control, and cost management, driving a further increase in the gross profit margin. For the 2025 fiscal year, the group anticipates a considerable expansion in its gross profit margin by 5.5 to 6.5 percentage points compared to the previous year.

Second, the optimization of management and marketing models has generated operational leverage, thereby reducing the expense ratio. The group has persistently pursued a restructuring of its management model and refined its marketing investment strategies through precision operations, leading to significant improvements in customer conversion efficiency and marketing return on investment. Furthermore, by optimizing the organizational structure and human resource allocation, overall operational efficiency has been further enhanced, and the cost structure has been effectively optimized. For the 2025 fiscal year, the group expects its sales and marketing expense ratio and general and administrative expense ratio to show a further declining trend compared to the previous year, decreasing by 5.0% to 6.0% and 2.0% to 3.0%, respectively.