United Imaging (UIH) reported strong 2025 results. Revenue rose 34.0% YoY to RMB13.8bn, 4% above our estimate, while attributable net profit increased 48.1% YoY to RMB1.9bn. In 1Q26, revenue grew 17.3% YoY to RMB2.9bn, slightly missing our expectation, accounting for 17% of our full-year forecast (vs. the historical average of ~20%). We therefore lower our 2026E revenue growth forecast from 25.7% to 22.5% YoY, although our absolute revenue estimate increases by 1.4% on a higher base in 2025.

Overseas expansion remains the key growth driver. Overseas revenue rose 51.4% YoY to RMB3.4bn in 2025, driven by strong growth across major regions, including North America (+56% YoY), Europe (+50% YoY), and APAC (+41% YoY). Momentum remained solid in 1Q26, with overseas revenue up ~27% YoY to approximately RMB710mn. In our view, the strong performance was driven by continued progress in high-end products such as PET/CTs and MRs, as well as improving global sales and service network. Overseas service revenue grew ~53% YoY in 2025. With rising brand recognition and increasing penetration into high-end customers, we expect overseas revenue to maintain robust growth in 2026E.

Domestic growth was driven by market share gains. Domestic revenue grew 29.1% YoY to RMB10.4bn in 2025, with UIH ranking No.1 in new installations across multiple products, including CT, MR, MI and RT. Share gains were particularly notable in MR (+6.4ppts), RT (+18.1ppts), and PET/CT (+13.5ppts). Looking ahead, equipment renewal projects are continuing to roll out. With the implementation experience in 2025, we expect the execution to accelerate and continue to support hospital procurement demand. However, the domestic market for medical imaging equipment declined 21.1% YoY in 1Q26, according to MDDi. Therefore, we believe that UIH’s revenue growth will face tougher comparisons in 2H26E given the lags between tender wins and revenue recognition.

Near-term GPM headwinds partially offset by favorable product mix. GPM declined 1.5ppts/2.8ppts YoY to 47.0%/47.2% in 2025/1Q26, respectively, mainly due to domestic VBPs, tariffs and higher liquid helium costs. Encouragingly, blended ASP increased by more than 20% YoY in 2025, driven by a richer mix of high-end systems. For example, revenue from 3.0T-andabove MR systems grew over 60% YoY and accounted for over two thirds of total MR revenue in 2025. Service revenue, which carries higher GPM than equipment sales, rose 26% YoY and accounted for 12.4% of total revenue in 2025. We believe that the mix shift toward high-end systems and services should help partially offset pressure from VBPs, tariffs, and elevated liquid helium costs. More diversified helium sourcing and greater in-house production of key components should also support margin improvement.

Maintain BUY. We remain positive on UIH’s long-term growth. However, we lower our 2026-28E earnings forecasts to factor in VBP pressure and elevated liquid helium costs in the near term. We therefore lower TP to RMB161.04 based on a 9-year DCF model (WACC: 8.1%, terminal growth: 4.0%).