[Huachuang Pharma] Weili Medical 1H26 Report Review: Domestic Revenue Grows Steadily, Procurement Pressures Gross Margin

English summary

The company released its financial report. 1H26 revenue was RMB 769 million (+3.18%), net profit attributable to shareholders was RMB 102 million (-15.76%), and non-GAAP net profit attributable to shareholders was RMB 98 million (-16.68%). In 2Q26, revenue was RMB 412 million (+3.74%), net profit attributable to shareholders was RMB 42 million (-32.34%), and non-GAAP net profit attributable to shareholders was RMB 40 million (-34.65%). In Q2, domestic revenue was RMB 190 million (+10%). Anesthesia and respiratory product lines drove domestic growth. Starting in June, the urology line, subject to volume-based procurement, began shipping in large quantities. After procurement, ex-factory prices for urology products fell by more than 60%, causing Q2 domestic gross margin to decline 8 percentage points YoY to 49.8%. In Q2, overseas revenue was RMB 210 million (flat). Domestic urology shipments have occupied production capacity, slowing overseas shipments, which is expected to ease in Q3. The Indonesia plant began shipping in July, and sterilization products are expected to ship in August. Overseas gross margin fell 2 percentage points YoY to just above 35%, due to product mix and exchange rates.