CICC Raises Target Price 7.3% on Strong 2025 Earnings
Investment bank CICC maintained its "Outperform" rating for AK Medical (01789) and lifted its target price by 7.3% to HK$7.63 on March 30, 2026. The upgrade follows the release of the company's full-year 2025 results, which showed a 24% year-over-year increase in net profit to 339 million yuan. Total revenue grew 10% to 1.48 billion yuan, driven by a 13% rise in its core hip and knee joint business, which generated 1.28 billion yuan. CICC's new target price represents a potential 31.3% upside from the current share price, with earnings per share forecast to reach 0.37 yuan in 2026.
Robotics Revenue Skyrockets 200% as Firm Accelerates Rollout
The company's strategic focus on high-margin technology is paying off, with the orthopedic robotics division reporting revenue growth of over 200% in 2025. This segment supported 4,000 surgeries during the year. Looking ahead, AK Medical plans to accelerate its commercialization efforts significantly in 2026 by deploying 100-120 new robotic systems. This expansion is projected to support between 10,000 and 14,000 surgical procedures and generate approximately 40 million yuan in revenue for the robotics business. This move positions AK Medical to capture a larger share of the global medical robotics market, which is projected to expand from $18 billion in 2026 to nearly $50 billion over the next decade.
HK$1.5 Billion Buyback Signals Confidence in Financial Health
AK Medical demonstrated robust financial discipline and a strong commitment to shareholder returns by announcing plans for a HK$1.5 billion share repurchase program. The company also proposed a dividend payout of 119 million yuan. These initiatives are backed by significant improvements in operational efficiency, including a 72-day reduction in inventory turnover days for 2025. The company's operating cash flow reached 120% of its net profit, indicating excellent liquidity and a solid foundation for funding its growth in robotics and its overseas expansion under its "JRI+AK" dual-brand strategy, which saw overseas revenue climb 20.1% to 330 million yuan.
