Nomura Upgrades United Imaging Healthcare to Buy Rating, Target Price of 137.6 Yuan, Optimistic About Strong Overseas Growth and Better-than-Expected Performance

Overview

This report provides commentary on United Imaging Healthcare’s (688271.SS) performance following its FY25/Q1FY26 financial results. The report highlights that the company achieved solid growth in revenue and operating profit in the first quarter of FY26, driven mainly by a rebound in demand for high-end medical equipment and accelerated overseas sales. The most significant change lies in management’s guidance for the full year FY26—forecasting revenue growth of at least 20%, significantly higher than previous institutional forecasts and the average growth rate among domestic peers. Based on these positive signals, Nomura Securities raised the company’s earnings forecast and upgraded its rating from Neutral to ‘Buy,’ increasing the target price to 137.60 yuan.

Core views

In terms of financial performance, United Imaging Healthcare reported revenue of 2.91 billion yuan in the first quarter of FY26, up 17% year-on-year; operating profit reached 390 million yuan, up 19%. Although gross margin fell 2.8 percentage points to 46.6% due to pricing pressures from volume-based procurement (VBP) and tariffs, operating margin improved slightly by 0.2 percentage points to 13.4% thanks to slower growth in R&D and administrative expenses. After accounting for increased taxes, net profit attributable to shareholders reached 399 million yuan, up 8% year-on-year. Regarding growth drivers, the report emphasizes that United Imaging Healthcare is one of the few medical device companies able to achieve both decent domestic growth and high overseas growth simultaneously. Management explicitly stated during the conference call that overseas sales are expected to surge by at least 50% year-on-year, driving overall full-year revenue growth of at least 20%. Calculations show that domestic market growth will remain in the low double digits, demonstrating remarkable resilience. In terms of valuation and rating adjustments, given the more optimistic sales outlook, Nomura raised its revenue forecasts for FY26 and FY27 by 2.8% and 3.4%, respectively. Using the DCF valuation model, assuming a WACC of 10.1% and a terminal growth rate of 4.0% (both unchanged), the target price was raised from 132.64 yuan to 137.60 yuan. At the current share price of 112.35 yuan, the stock trades at a P/E ratio of 36.4 times FY26 fully diluted earnings per share, leaving about 22.5% upside potential.

Analysis framework

The report’s analytical logic follows the path of ‘performance validation—expectation gap correction—valuation reassessment.’ First, by interpreting the latest financial results, it confirms that the company’s fundamentals are on a recovery track, especially the explosive growth in overseas markets, which has become a key highlight. Second, it focuses on capturing the ‘expectation gap’ in management’s guidance—the 20% full-year revenue growth target significantly exceeds market consensus, directly forming the basis for raising the earnings forecast. Finally, using the DCF model, while keeping long-term macro assumptions (WACC and terminal growth rate) unchanged, the increase in cash flow projections naturally boosts intrinsic value, leading to the revised target price. This analytical approach highlights the dual consideration of short-term performance turning points and medium-to-long-term growth quality.

Methodology notes

• Valuation MethodDCF Discounted Cash Flow

  DCF Discounted Cash Flow Model

  The report uses the DCF model to calculate the stock’s intrinsic value. Its core logic is to discount future free cash flows generated by the company at a discount rate reflecting risk levels (WACC) to their present value. In this report, analysts believe that the company’s long-term profitability has strengthened (revenue upgrade), so even if the discount rate and long-term growth rate assumptions remain unchanged, the total present value of future cash flows increases, supporting a higher target price.

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Analysis of Supply and Demand Structure for High-End Medical Equipment

  The report analyzes changes on both the demand side (rebound in demand for high-end equipment, rising brand recognition) and the supply side (capacity ramp-up, overseas expansion) to assess industry sentiment. It specifically points out the structural feature of strong overseas market demand (growth rate >50%) coexisting with intense competition in the domestic market (pressure from centralized procurement). This supply-demand mismatch creates new growth opportunities.

• Event Game Theory and Behavioral FinanceExpectation Gap/Expectation Management

  Comparison Between Management Guidance and Market Expectations

  The report focuses on management’s FY26 full-year growth guidance of 20%. When actual guidance or official forecasts exceed analysts’ previous model predictions, a ‘positive expectation gap’ emerges. Such expectation gap corrections often serve as direct catalysts for stock price and rating adjustments, as the market revalues the company’s growth attributes.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• United Imaging Healthcare (688271.SS)

  Benefit Logic: As a leader in high-end medical imaging equipment, the company benefits from the rebound in domestic demand and rapid growth in overseas market share. Management’s high-growth guidance confirms its global competitiveness, making it one of the few stocks in the sector with a clear and certain growth logic.

  Strengths

  Extremely fast overseas sales growth (guidance >50%), recognized premium branding; good cost control, operating margin improves against the trend; strong cash reserves (net cash position).

  Weaknesses

  Domestic market faces pricing pressure from centralized procurement (VBP); tariff policies may negatively impact overseas profits; large R&D investment leads to short-term net profit growth lagging behind revenue growth.

  Comparison

  Compared to other domestic medical device peers, United Imaging Healthcare is the only company explicitly mentioned in the report as capable of achieving both ‘steady domestic growth’ and ‘high overseas growth,’ making its growth profile particularly prominent.

  Risks

  Slower growth in the domestic market; overseas market expansion falling short of expectations; narrowing valuation premium.

Key data

• FY26 Q1 Revenue2.91 billion yuanUp 17% year-on-year
• FY26 Q1 Operating Profit390 million yuanUp 19% year-on-year
• FY26 Q1 Gross Margin46.6%Down 2.8 percentage points year-on-year, affected by VBP and tariffs
• FY26 Q1 Operating Margin13.4%Up 0.2 percentage points year-on-year
• FY26 Full-Year Revenue Guidance≥20%Year-on-year growth, above previous institutional expectations
• Overseas Market Growth Guidance≥50%Year-on-year growth, key driver of overall growth
• Target Price137.60 yuanRaised from previous 132.64 yuan
• Current Share Price112.35 yuanAs of April 28, 2026
• Implied Upside Potential22.5%Calculated based on the new target price
• FY26 P/E Ratio36.4xBased on fully diluted earnings per share

Impact & implications

For United Imaging Healthcare, this rating upgrade indicates substantial progress in domestic substitution and global expansion, especially the breakthrough in overseas markets, which alleviates market concerns over excessive pressure from domestic centralized procurement. For investors, the report suggests that the company is entering a phase of steeper growth, with high overseas growth becoming the primary valuation support. However, investors should also pay attention to ongoing downward pressure on gross margins and continue monitoring the sustainability of overseas markets.

Risks

• Slower growth in the domestic market
• Overseas market expansion falling short of expectations
• Narrowing valuation premium

What to watch

• Sustainability of overseas sales growth
• Further impact of domestic centralized procurement policies on gross margins
• Recovery status of demand for high-end medical equipment