A market often lacks patience for a company that spends 11 years building an AI healthcare infrastructure. However, the narrative changes entirely when that company posts its first full-year profit, with half-year earnings surpassing 70 million yuan. As of 3:00 PM on April 24th, foreign institutions dominated the top ten buyer list for AI healthcare leader YIDU TECH (02158), occupying seven spots, with the top six all being major foreign brokers. Notably, JP Morgan and Morgan Stanley recorded net purchases exceeding 500,000 shares. This is just one indicator of foreign interest following YIDU TECH's positive profit alert issued on April 20th.
According to this announcement, YIDU TECH is projected to achieve a net profit between 55 million and 70 million yuan for the 2026 fiscal year (ending March 31, 2026), marking its first annual profit since its founding 11 years ago. While the shift from loss to profitability is significant, a deeper analysis of the financials is more striking. The company reported a net loss of 15.76 million yuan for the first half of fiscal 2026, implying a remarkable profit between 70.76 million and 85.76 million yuan was achieved in the second half alone. Once established, this 'snowballing' profit growth model carries substantial momentum.
Using a conservative estimate, even if YIDU TECH merely maintains its second-half 2026 profitability level, its full-year profit for fiscal 2027 could reach 141 million to 170 million yuan. Based on the current share price of approximately HK$6.20, this profit projection corresponds to a forward price-to-earnings (PE) ratio of just 3 to 4 times. This represents a significant 'valuation gap' compared to the market's typical valuation of over 10 times PE for AI concepts, especially those with core technology and data barriers like AI healthcare enterprises. From a purely financial perspective, YIDU TECH appears to have at least double the upside potential.
Market sentiment is perceptive. Recent trading data shows that the top seven positions by purchase value over the past five trading days were all foreign institutions. This is undoubtedly a vote of confidence in YIDU TECH's future performance and growth potential. These investors likely see value beyond the short-term profitability. Citi, a long-time supporter, reiterated its 'Buy' rating with a target price of HK$11 following the profit alert, suggesting nearly 80% upside from the current price.
This confidence is well-founded. Shortly after the profit alert, YIDU TECH announced it had won a contract for the 'Hainan Smart Health Island Construction Project,' valued at approximately 14.76 million yuan. Combined with recent project wins, including one with Beijing Cancer Hospital (approx. 4.88 million yuan) and the Hainan Provincial Infectious Disease Surveillance and Early Warning Platform (approx. 12.89 million yuan), the total value of newly disclosed contracts since April alone approaches 40 million yuan. While its exact historical ranking is unclear, this figure likely represents one of the company's highest monthly contract values on record.
The clustering of new contract wins and the positive profit alert create powerful resonance. This sends at least two key signals. First, YIDU TECH's AI business model is gaining widespread market validation, successfully transitioning from 'technology verification' to 'commercial realization.' The take-off in contract orders provides solid backing for second-half performance. Second, the timing of this concentrated positive news, coupled with previous intensive share buybacks totaling nearly HK$240 million (over 2% of shares), may not only reflect strong operational performance but also indicate strategic considerations by management regarding the company's capital market standing.
YIDU TECH's core value lies in its YiduCore data intelligence infrastructure, built over more than a decade. This platform has processed nearly 7 billion medical records and serves over 10,000 medical institutions. This profound data barrier is difficult for competitors to replicate in the short term. As AI technology deeply integrates into core scenarios like clinical decision support, public health emergency response, and pharmaceutical R&D, the value generated will far exceed simple software sales. Founder Gong Rujing emphasized in an internal sharing session that profitability is not the final financial goal, but rather a signal that the medical evidence infrastructure, built over more than ten years, is beginning to operate self-sufficiently. This transition from 'cash-burning R&D' to 'self-sustaining operations' is precisely the inflection point capital markets anticipate.
With its positive profit alert, YIDU TECH has announced the arrival of the commercialization era for AI healthcare. The current significantly undervalued share price may represent the best entry point for patient investors. As more high-value-added AI products are deployed and scaled, the revaluation journey for this newly profitable company has only just begun.
Comments