CICC Maintains Outperform Rating on YIDU TECH (02158) with Target Price of HK$6.8

Stock News12-04

CICC has released a research report maintaining its revenue forecasts for YIDU TECH (02158) for fiscal years 2026 and 2027 largely unchanged. Considering the company's cost control measures, the net profit attributable to shareholders for fiscal 2026 and 2027 has been revised upward from -CNY45.69 million and CNY4.11 million to CNY0.41 million and CNY54.57 million, respectively. The outperform rating and target price of HK$6.8 (based on 8x FY2026 P/S) remain unchanged. Currently trading at 6x FY2026 P/S, the target price implies a 33% upside potential from the current share price.

Key highlights from CICC's analysis include: 1. **FY2026 First-Half Revenue Meets Expectations**: YIDU TECH reported revenue of CNY360 million for the first half of FY2026, up 8.7% YoY, broadly in line with expectations. Net losses narrowed significantly by approximately 72% YoY.

2. **Dual Drivers: Data Elements & AI Technology**: - The big data platform and solutions segment saw revenue grow 14.6% YoY to CNY153 million, benefiting from policy-driven business expansion. The company is investing heavily in a 70B-parameter medical large language model, with its AI mid-platform supporting innovative applications in hospitals and medical aesthetics. Collaborations with leading hospitals explore AI digital avatars. - Life sciences solutions revenue dipped 4.4% YoY to CNY138 million, though AI integration into clinical trials is advancing. As of September 30, 2025, 17 of the top 20 multinational pharmaceutical firms were clients. - Health management platform revenue surged 30.3% YoY to CNY66.67 million, with the "Huiminbao" insurance program covering 13 cities across 5 provinces. Shenzhen's Huiminbao saw record participation, exceeding 6.15 million enrollees in 2025.

3. **Business Focus and Loss Reduction**: - Gross margin improved by 1.8 percentage points YoY to 37.4%, with the big data segment’s margin rising 5.1 points to 42.5%. - Net losses narrowed to CNY15.76 million, a 72% YoY improvement, driven by operational optimization and cross-business synergies. - Operating cash outflow shrank 56% YoY due to enhanced capital management.

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