Recently, United Imaging Healthcare released its 2024 semi-annual report. In the first half of the year, United Imaging Healthcare's revenue was 5.333 billion yuan, a year-on-year increase of 1.18%; it achieved a net profit attributable to the parent of 950 million yuan, a year-on-year increase of 1.33%; and a net profit attributable to the parent of 798 million yuan, a year-on-year increase of 1.39%.

In the semi-annual report, the growth of United Imaging Healthcare slowed down, and based on this, the stock price has been falling. Now that the market value of United Imaging Healthcare is not guaranteed, how can the upstart break through?
Founded in 2011, United Imaging Healthcare is committed to providing global customers with a full range of independently developed high-performance medical imaging diagnostic and treatment equipment, life science instruments, and innovative solutions covering the entire chain of "basic research-clinical research-medical transformation".

Since its listing on the Science and Technology Innovation Board of the Shanghai Stock Exchange on August 22, 2022, United Imaging Healthcare has been writing "miracles". On the day of listing, United Imaging Healthcare issued 100 million shares at a price of 109.88 yuan per share, with a total financing amount of 10.988 billion yuan, becoming the largest IPO on the Science and Technology Innovation Board that year, and also the third largest IPO since the establishment of the Science and Technology Innovation Board. And on the first day of listing, the share price of United Imaging Medical soared by more than 60%, and the market value once exceeded 150 billion yuan. It was hailed as the "first stock of domestic high-end medical imaging equipment".

Two years later, United Imaging Medical has fallen from a market value of 100 billion yuan. Perhaps there is a question, looking at the semi-annual report, although the growth rate has slowed down, the revenue and net profit attributable to the parent are still at a new high. Why is United Imaging Medical in deep trouble? This answer has been seen in previous financial reports and prospectuses.

United Imaging Medical's business focuses on the field of medical imaging, and the CT and MR business segments account for most of the revenue. The CT business has been carrying the banner of United Imaging Medical's revenue since 2019. From 2019 to 2021, the sales revenue share of United Imaging Medical CT ranked first, increasing from 34.67% to 47.87%. However, starting from 2022, the sales volume of CT was 1,769 units, a year-on-year decrease of 2.48%; sales revenue was 3.772 billion yuan, a year-on-year increase of 10.26%, and the proportion of total revenue dropped to 40.83%.

In 2023, United Imaging Healthcare achieved operating income of 11.141 billion yuan, a year-on-year increase of 23.52%. This is the first time that United Imaging Healthcare's annual revenue has exceeded the 10 billion mark; it achieved a net profit attributable to shareholders of 1.974 billion yuan, a year-on-year increase of 19.21%, and a non-net profit of 1.665 billion yuan, a year-on-year increase of 25.38%. Despite the booming revenue, the proportion of CT business is still declining: sales volume increased by only 30 units compared with the previous year, sales revenue increased by 7.78% year-on-year, and the proportion further dropped to 35.63%.

The decline in the proportion of CT is certainly one of the reasons for United Imaging Healthcare's current difficulties, but looking at the overall environment, the medical industry is in a capital winter, and the anti-corruption storm in the second half of 2023 has also brought a considerable impact on the medical industry.

Based on these influences, the situation of United Imaging Healthcare has not improved in 2024. In Q1 2024, United Imaging Healthcare achieved operating income of 2.35 billion yuan, a year-on-year increase of 6.22%; it achieved a non-net profit of 300 million yuan, a year-on-year increase of 8.52%, and its performance growth rate hit a record low since 2021. In Q2 2024, United Imaging Healthcare's revenue fell by 2.47% year-on-year. This is the first time that a single-quarter year-on-year decline has occurred since United Imaging Healthcare went public.
This downward trend has continued into the 2024H1 financial report: CT business sales in the first half of the year were 1.618 billion yuan, a year-on-year decrease of 22.73%, accounting for 30% of total revenue, and is no longer the business with the highest revenue share; XR's performance was not ideal, with revenue of 256 million yuan in the first half of the year, a year-on-year decrease of 20.74%; Fortunately, MR still supported revenue during its difficult times, generating revenue of 1.685 billion yuan in the first half of the year, a year-on-year increase of 12.26%, accounting for 32%, surpassing the CT business.
In addition, United Imaging Medical's domestic revenue has also declined. In the first half of 2024, the revenue was 4.401 billion yuan, a year-on-year decline of 3.36%, and domestic revenue accounted for 82.51%.
Although the domestic market of United Imaging Medical is temporarily under short-term pressure, the pace of research and development has not stopped, and the amount of research and development has increased year by year. In 2023, the research and development expenses were 1.729 billion yuan, a year-on-year increase of 32.33%. In the first half of 2024, the total investment in research and development of United Imaging Medical exceeded 1 billion yuan, a year-on-year increase of 11.11%.
Based on the continuous investment in high R&D funds, United Imaging Medical currently has a rich product pipeline, and has applied for 10,327 intellectual property rights and obtained 5,516 in total.
In addition, although the above article mentioned that United Imaging Medical's CT business no longer carries the banner of revenue, and even revenue has begun to decline, its market position in China's CT products has remained consistent, and many businesses rank at the forefront of the domestic market.
Due to the anti-corruption campaign in the medical field, the decline in centralized procurement prices, and the intensified competition, many companies in the medical device sector, except United Imaging Healthcare, have seen their quarterly or semi-annual financial reports plummet or decline sharply. This is not only the case in the imaging industry, but also in the grassroots market, IVD companies, and ophthalmology companies. According to incomplete statistics, at least 16 medical device companies have seen a significant decline in performance, with all reports turning green.
Although the performance of some medical equipment companies is relatively sluggish at present, the country has intensively introduced a number of policies on equipment renewal in the medical and health field this year, aiming to encourage medical institutions in various regions to update old equipment through the old-for-new method and promote the high-quality development of the medical equipment industry.

With the implementation of the renewal policy, the bidding and procurement activities of medical institutions gradually resumed in the third and fourth quarters, and the performance of a number of domestic medical equipment companies may be expected to pick up.

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