Guotai Junan Securities: Maintains rating of "buy" for XUNFEIHEALTH (02506), raises target price to HKD 154.48.

Guotai Haitong issued a research report stating that XUNFEIHEALTH (02506) has shown strong growth in its BC business. With the application and deep expansion of large models in the medical field, the company has a broad market space. The bank predicts that the company's operating income will be 975 million/1.244 billion/1.554 billion yuan in 2025/26/27 respectively. Using PS valuation and referencing comparable companies, the bank gives the company a target price of 154.48 Hong Kong dollars in 2025, maintaining a "buy" rating. Guotai Haitong's main points are as follows: Stable performance growth, with growth engines in B&C business In 2024, the company's revenue was 734 million yuan (+32.0%), with a gross profit of 404 million yuan (+28.4%). The company's income structure has been significantly optimized, with medical business revenue in 2024 reaching 132 million yuan (+103.4%) and patient service revenue reaching 211 million yuan (+56.6%). Combined, the proportion has increased from 35.9% in 2023 to 46.8%. G-end revenue maintained stable growth, with grassroots medical services and regional management platform revenue reaching 391 million yuan in 2024 (+9.7%). Comprehensive coverage has increased significantly, with the data flywheel accelerating the intelligent process By the end of 2024, the Smart Medical Assistant had covered more than 670 counties and districts in 30 provinces and cities nationwide, providing approximately 910 million AI-assisted diagnostic suggestions, covering over 1900 diseases, effectively reducing the risk of misdiagnosis, missed diagnosis, and medication errors. The hospital scene continued to expand, serving over 500 secondary/tertiary hospitals (including 40 of the top 100 and 7 of the top 10 hospitals). Breakthroughs in AI post-diagnosis patient management have been achieved in top hospitals in Jiangsu, Shandong, and 6 other provinces/autonomous regions. The imaging cloud platform covers 1970 medical institutions and 3200 expert resources, storing over 110 million imaging data, and integrates with the Xunfei medical big model to achieve intelligent "quality control-diagnosis-reading" throughout the process. Launch of the Xunfei Big Model X1, leading the AI medical industry into the "deep thinking" era In March 2025, the company released the Xunfei medical big model X1 based on deep inference technology. By relying on millions of authoritative medical knowledge and high-quality de-identified diagnosis and treatment data, the accuracy of real-world data testing surpassed GPT-4o and DeepSeek R1. The company collaborated with Huawei to launch the Xunfei medical integrated machine, which uses Huawei Ascend hardware to achieve full-stack localization support. Through tools such as built-in knowledge distillation, model fine-tuning, and a "one-stop" intelligent body platform, the platform assists in the construction of private domain knowledge engineering in medical institutions and the rapid development of exclusive intelligent bodies. Risk warning: downstream demand lower than expected, policies lower than expected, intensified market competition.