Economic Observer reporter Zhang Ying

On April 16th, Kaikai Medical (300633. SZ) released its 2025 annual report: revenue resumed growth, with a year-on-year increase of 14.7% to 2.3 billion yuan; The net profit was nearly 200 million yuan, an increase of 38.5% year-on-year.

Kaikai Medical is one of the few A-share medical device companies to achieve a double increase in revenue and net profit by 2025. According to the Economic Observer, among the 26 A-share medical device companies that have released annual reports, 10 companies have achieved both revenue and net profit growth. From the perspective of net profit growth alone, opening medical services ranks among the top three.

Open Medical is a leading domestic enterprise in ultrasound and endoscopy. In the domestic ultrasound field, its market share is second only to Mindray Medical; In the field of endoscopy, it is the local company with the highest market share.

Ultrasound is the starting business of medical services. In 2025, the revenue from opening medical ultrasound business is about 1.2 billion yuan, a year-on-year increase of 4.5%, but the gross profit margin has decreased by 5.5 percentage points. At the performance briefing, Luo Yuezuo, the Chief Financial Officer of Kaifeng Medical, introduced that the decline in gross profit margin is mainly affected by centralized procurement factors, and ultrasound centralized procurement revenue accounts for about 20% of domestic sales.

The price reduction of ultrasound centralized procurement is significant. Taking the ultrasound procurement project with a budget of approximately 140 million yuan by the Ningxia Health Commission in June 2025 as an example, the winning bids for medical and Mindray medical services were opened, with a total bid price of 16.12 million yuan, which is only 12% of the budget price. According to Mindray Medical's 2025 annual report, the medical imaging segment under ultrasound saw a year-on-year decline of 18% in revenue and a 4.2 percentage point decrease in gross profit margin.

According to Li Hao, the Secretary of the Medical Board, based on the overall procurement bidding price of ultrasound equipment in 2025, it is approximately 40% of the normal price. However, he also mentioned that in the second half of 2025, with the relevant departments proposing the "anti involution" policy, the bidding prices will rebound.

Endoscopy is the second growth curve for medical development, with revenue exceeding 1 billion yuan in 2025, a year-on-year increase of 27%, and a gross profit margin growth of about two percentage points to 68.6%. In the domestic market, the market share of opening medical endoscopes will increase to 14% by 2025, second only to multinational companies Olympus and Fuji.

Compared to the ultrasound business, opening a medical service has greater confidence in the endoscopic business by 2026. Li Hao expects that there will be significant changes in the revenue structure of the endoscopic business in 2026. His high-end product HD-650 will achieve stable mass production and launch in 2025, accounting for 10% -15% of the overall endoscopic revenue that year. 2026 will be a crucial year for the significant increase in sales of this product, and the goal of opening a medical service is to increase its sales to 50% of the endoscopic business line.

One point of concern for investors in opening medical annual reports is that there has been a significant decline in net operating cash flow. In 2025, its net operating cash flow will shift from positive to negative, decreasing from 306 million yuan in 2024 to 0.48 billion yuan in 2025. At the performance briefing, Luo Yuezuo proactively mentioned this issue, 'From the perspective of overall financial data management of the company, the operating cash flow in 2025 is the area where we did not do well.'.

His explanation is that the operating cash flow is mainly affected by two factors: firstly, inventory. In 2025, due to the US China tariff war, the opening of medical services initiated strategic stocking and increased inventory proactively; Secondly, when promoting several new products to enter multiple tertiary hospitals, hospitals need to try them out, and as a result, many new prototypes have been added to the hospitals. The impact of these two factors on cash flow is approximately 286 million yuan. He also mentioned that with the overall price increase of memory modules, early stocking is expected to have a positive impact in 2026.