United Imaging (UIH) reported 1H25 revenue of RMB6.0bn (+13% YoY), with revenue growth accelerating to 18.6% YoY in 2Q25. Attributable net profit increased 5% YoY to RMB1.0bn in 1H25. Revenue in 1H25 accounted for 49% of our prior full-year forecast, above the historical average of ~46%. According to Joinchain, domestic medical equipment tenders increased 63% YoY in 1H25. Driven by a strong recovery in domestic procurement volume and a low base in 2H24, we forecast UIH’s revenue growth to accelerate to 36.7% YoY in 2H25E. n Overseas business remained strong. UIH’s overseas revenue grew 22.5% YoY to RMB1.1bn in 1H25, representing 19% of total revenue (+1.5ppts YoY). Europe reported robust revenue growth of 94% YoY to RMB179mn, driven by strong replacement demand in Western Europe and rising adoption of high-end imaging in Eastern Europe. North America also delivered strong performance, with revenue up 68% YoY to RMB436mn. Proactive inventory buffers and a diversified global supply chain helped UIT to mitigate tariff headwinds. Mgmt noted that the overseas order intake remains strong, supporting further growth acceleration in 2H25E. Continued FDA/CE approvals for innovated products such as the uMR Ultra 3.0T and uAngio AVIVA should drive long-term overseas growth, in our view.

Domestic business is recovering. UIH’s domestic revenue increased 10.7% YoY to RMB4.9bn in 1H25, driven by a strong recovery in procurement activities and a 3.4ppts YoY gain in market share. High-end product lines delivered robust performance. For example, in 1H25, UIH’s 3.0T MRI market share rose over 5ppts YoY, and order value for the uMR Jupiter 5T grew 32% YoY. PET/CT franchise maintained the No.1 market share in China for the tenth consecutive year, while PET/MR leads in cumulative installations. Market share for RT and DSA also advanced significantly, up by nearly 18ppts and over 5ppts YoY, respectively. The recent NMPA approval of the photon-counting spectral CT, uCT Atlas Elite, further strengthens UIH’s high-end portfolio. We believe continued innovation and policy-driven equipment renewal will drive sustained domestic growth.

Service revenue is scaling rapidly. In 1H25, service revenue grew 32% YoY to RMB816mn, representing 13.6% (+2.0ppts YoY) of total revenue. Notably, service revenue from Europe and the US doubled thanks to an expanding installed base. As of 1H25, UIH’s global installed base exceeded 36,000 units. With a growing installed base and a strengthening global service network, we believe recurring service revenue is likely to become an increasingly important driver of resilient long-term growth.

Maintain BUY. Considering the rapid domestic recovery in 2025E and strong overseas growth momentum, we raise our 2025-2027E revenue forecasts, implying a 22.6% CAGR. Based on a 9-year DCF model (WACC: 8.1%, terminal growth: 4.0%), we raise our target price to RMB163.49.