The domestic high-end medical imaging leader reshapes the GPS monopoly pattern. The company has formed a rich product line around high-end medical imaging equipment. With the rapid growth of revenue at a CAGR of 39.9% from 2019 to 2023, the company's MR, CT, MI, and conventional DR will rank second, first, first, and tied for second in the domestic market share in 2024, respectively, reshaping the domestic medical imaging market pattern monopolized by "GPS" in the past.

In the overseas market, the company is holding high, and from 2019 to 2023, the company's overseas revenue CAGR will reach 102%.

Based on R&D, shape core competitiveness. Medical imaging equipment is one of the market segments with the highest technical barriers in the medical device industry, and the company maintains a high level of R&D investment, and the R&D expense rate remains at a high level of more than 13%. The company has formed a well-structured and efficient R&D platform, which helps the product line to be as complete as "GPS", and uMR Jupiter 5T, uMR Omega, uEXPLORER (Total-body PET/CT) and other products have reached the industry-leading level. In order to make up for the shortcomings of the upstream parts of the domestic imaging equipment, the company has built a vertical R&D system to carry out core technology research and development around the core components of each product line, and the company's self-research ratio ranks among the top in the industry. In addition, the company increased its capital in United Imaging Intelligence to strengthen its AI technology support capabilities.

Look at the future growth space from four aspects.

1) Domestic: The medical imaging market is expected to usher in an inflection point in 25 years, and the high-end domestic substitution and county-level grassroots markets have great potential. Since 24Q4, the equipment update has been significantly improved, and the market is expected to usher in an inflection point in 25 years, and the company will also benefit as a domestic leader. China's per capita image resources still have a lot of room for improvement, and the liberalization of allocation certificates will further stimulate growth, and it is expected that domestic enterprises will still have great development potential in the high-end and grassroots markets in the future.

2) Overseas: The vast overseas market is free to gallop and establish a new paradigm of going to sea. The global medical imaging market is 5 times larger than China's and continues to grow. Different from Japanese manufacturers, the company has set a new paradigm for going overseas. The company has launched its brand in high-end customer groups with PET/CT with leading performance, driven the whole line of products to go overseas, strengthened scientific research cooperation, international service and supply chain network construction, and improved overseas supporting capabilities.

3) Ultrasound: Accumulate thick and thin hair into the field of ultrasound and open up the upward space. In 24 years, the global ultrasound market size is nearly 10 billion US dollars, and the space is vast; There has been a great breakthrough in the domestic substitution of the low-end ultrasound market, and the high-end market is still dominated by imports. Relying on its strong R&D capabilities in the field of imaging, the company has entered the field of ultrasound by self-research, and it is expected that the product will be able to leverage the existing channel base to rapidly increase volume and further open up growth space after the product is launched.

4) Maintenance: The proportion of revenue continues to increase and improve profitability. Recurring revenue, such as maintenance services, is an important part of "GPS" revenue, and the gross profit margin is higher. With the increase in the number of installed capacity, it is expected to reach 30-40% (refer to GPS) in the future, becoming a new increment and improving profitability.

Investment suggestion: The company is a domestic high-end medical imaging leader with breakthroughs across the board, and has invested for many years to create a strong platform-based technical strength and vertical innovation ability of imaging equipment. The short-term domestic market is expected to improve significantly in the next 25 years with the improvement of equipment renewal and anti-corruption margins; In the long run, the domestic grassroots and high-end markets still have great potential, and the overseas space is broad, and the company's "high and high" overseas strategy has been fruitful; In addition, the proportion of the company's maintenance with high gross profit margin continues to increase, and the ultrasound business will also contribute to new growth in the future. We expect that the company's net profit attributable to the parent company in 24-26 years will be 12.6, 18.9 and 2.31 billion yuan respectively, with a year-on-year growth rate of -36.1%, 49.4% and 22.8% respectively. Considering the above factors, referring to the valuation of comparable companies, combined with the company's high historical PE center, 68X PE is given in 2025, corresponding to a target price of about 156 yuan. For the first time, a "Recommended" rating is given.

Risk Warning: 1. Risks of centralized procurement of domestic medical equipment; 2. Overseas expansion is affected by geopolitical factors; 3. The R&D/promotion of high-end products is less than expected; 4. The implementation of the equipment update policy is not as expected.