In 2024, United Imaging’s revenue declined 9.7% YoY to RMB10.3bn, with attributable net profit decreasing 36.1% YoY to RMB1.3bn mainly due to the challenging domestic market environment. Due to delays in equipment renewal policies and prolonged industry rectification, the domestic medical equipment market contracted by 12.4% YoY in 2024, according to IQVIA. Despite the challenging environment, United Imaging’s GPM improved by 1.5 ppts YoY, supported by higher proportion of revenue from mid-to-high-end products (+0.9 ppts equipment GPM) and services (+1.7 ppts GPM from scale/cost optimization). In 1Q25, United Imaging achieved turnaround in earnings with revenue and attributable net profit increasing by 5.4% and 1.9% YoY respectively, indicating a recovery in the domestic market.

Overseas business remained robust. In 2024, overseas revenue grew 35.1% YoY to RMB2.3bn, accounting for 22.0% of total revenue (+7.3ppts YoY). Ex- North America revenue rose ~28% YoY to RMB1.6bn, accounting for ~71% of the total overseas revenue. United Imaging continued to expand in European and emerging markets, with installation breakthroughs in France, Germany, and emerging markets such as South Africa, Morocco, and Brazil in 2024. Its market share in India rose to second place. The strong momentum of overseas business persisted in 1Q25, and we expect overseas business to remain a key growth driver in 2025E. With North America contributing only ~6% of total revenue, the impact of trade frictions may be limited. Proactive inventory management and global supply chain diversification will further help mitigate the risks of trade tensions.

Domestic business was under pressure but signs of recovery have

emerged. In 2024, domestic revenue fell by 17.5% YoY to RMB8.0bn.

However, the Company’s market share in domestic imaging equipment (excluding ultrasound and DSA) increased significantly, ranking first in market share, with significant share gains (+5ppts) in the high-end market. Domestic procurement recovered strongly in 1Q25, with the domestic medical equipment bidding value up 67.5% YoY, according to Joinchain. Given the long revenue recognition cycle for large equipment, we expect meaningful recovery of domestic revenue from 2H25E.

Services income grew fast. Services revenue increased by 26.8% YoY to RMB1.4bn in 2024, with revenue contribution growing to 13.2% (+3.8ppts YoY).

However, there remains a significant gap compared to GE Healthcare’s 34% service revenue share in 2024, indicating large room for improvement. As of 2024, the Company’s global installed base exceeded 34,500 units. With expanding installed base, we expect service revenue to maintain rapid growth.

Maintain BUY. Given the uncertain pace of domestic market recovery and ongoing trade frictions, we revise down our 2024-2027E revenue forecasts to a CAGR of 18.1%.Thus, we adjust our TP to RMB149.83, based on a 9-year DCF model (WACC: 8.2%, terminal growth: 4.0%).