After setting a five-year goal of "10 billion yuan in revenue and 100 billion yuan in market value," Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. (Yuyue Medical) is now entering the final year of this ambitious pledge. However, the latest Q3 2025 financial report reveals a concerning picture: while revenue grew 8.58% year-on-year to 6.545 billion yuan in the first three quarters, net profit attributable to shareholders dropped 4.28% to 1.466 billion yuan. More alarmingly, Q3 net profit plunged 36% year-on-year, highlighting a classic "revenue growth without profit growth" scenario.
From its pandemic-driven boom to current growth stagnation, Yuyue Medical faces significant challenges. With its market capitalization hovering around 36 billion yuan—far from the 100 billion target—and annual revenue struggling to approach 10 billion yuan, the company's post-pandemic hangover has exposed structural weaknesses.
1. Expansion Hangover: High Goodwill and Soaring Costs Squeeze Profits Since its 2008 IPO, Yuyue Medical has pursued aggressive M&A expansion, acquiring companies from Suzhou medical suppliers to Germany's Primedic, rapidly entering infection control, emergency care, ophthalmology, and glucose monitoring sectors. By 2023, it boasted 50 subsidiaries and nearly 600 product registrations.
Yet these acquisitions came at a cost: goodwill ballooned from 806 million yuan in 2020 to 1.107 billion yuan in 2023, remaining elevated at 1.084 billion yuan in 2024. The company recorded nearly 100 million yuan in combined goodwill and credit impairment losses in 2023-2024.
Meanwhile, sales expenses surged 33.15% to 1.233 billion yuan in Q1-Q3 2025—outpacing revenue growth—with e-commerce platform fees jumping 43.44% to 492 million yuan. Rising administrative and R&D expenses further eroded margins.
2. Intensified Competition and Eroding Trust In the home medical device sector, price wars are escalating. Foreign brands are penetrating mid-to-low-end markets while domestic rivals accelerate technological catch-up, squeezing Yuyue's core products like ventilators and oxygen concentrators. Despite new product launches and global expansion efforts, results remain elusive.
Compliance issues have further damaged reputation. During the pandemic, its oximeter price hikes drew accusations of profiteering, resulting in a 2.7 million yuan fine in 2023. In June 2025, a military procurement bid was revoked due to violations. Consumer platforms host over 500 complaints about product quality and after-sales service.
3. Transformation Gambit: Can AI and New Products Turn the Tide? To break the growth deadlock, Yuyue is betting on AI healthcare solutions and new products across respiratory therapy and blood pressure monitors, integrating some offerings with Alibaba and JD.com platforms.
However, Q3 2025 shows these moves haven't reversed profit declines: core operating profit (non-GAAP) fell 8.21%, with government subsidies and investment income propping up earnings.
Conclusion As Yuyue Medical approaches its deadline, the "10/100 billion" targets appear increasingly unattainable. Mounting goodwill risks, runaway marketing costs, cutthroat competition, and recurring compliance scandals form formidable barriers. While AI and innovation offer potential lifelines, sustainable growth hinges on balancing profitability, product credibility, and execution discipline.
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