Wandong Medical reports first loss after multiple regional revenue declines; price cuts to secure projects pressure profits with a gross margin of 26%

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Yangtze Business Daily news ●Yangtze Business Daily reporter Xu Jia

Nearly 29 years since listing, Wandong Medical (600055.SH) has posted its first-ever loss.

On the evening of March 25, Wandong Medical released its annual report. In 2025, the company achieved operating revenue of RMB 1.347 billion, down 11.64% year over year; net profit attributable to shareholders of listed companies and net profit after deducting non-recurring gains and losses (hereinafter referred to as “net profit attributable to shareholders, net profit after non-recurring items”) were losses of RMB 228 million and RMB 245 million, respectively. Both decreased from profit to loss year over year—this is the first time the company has reported a full-year performance loss since it listed in 1997.

Yangtze Business Daily noticed that by deeply participating in centralized procurement of medical equipment, Wandong Medical successfully won bids for medical imaging equipment projects through more competitive pricing proposals. The price adjustments had a certain impact on the gross margin, which compressed the profit space to some extent. Meanwhile, the company increased its R&D and marketing spending efforts, which also put pressure on its performance.

The annual report shows that in 2025, Wandong Medical’s main business gross margin was 26.59%, down sharply by 9.07 percentage points year over year. During the reporting period, the company’s R&D expenses were RMB 263 million, up 59.28%, with a growth rate far exceeding that of revenue. At the same time, the company’s selling expenses were RMB 277 million, up 26.29%.

Later on the same evening, Wandong Medical announced that the company plans to transfer 100% of the equity interest in its wholly owned subsidiary, Suzhou Wanying Medical Technology Co., Ltd. (hereinafter “Wanying”), to a Midea-affiliated company by valuing the transaction at RMB 48 million.

Full-year loss of RMB 228 million

As a core provider of domestic medical imaging equipment and smart healthcare solutions, Wandong Medical faced short-term performance pressure amid major changes such as centralized procurement of large-scale medical equipment and DRG medical insurance payment reform.

The annual report shows that in 2025, Wandong Medical achieved operating revenue of RMB 1.347 billion, down 11.64% year over year. Net profit attributable to shareholders was a loss of RMB 228 million, down 244.81% year over year; net profit after non-recurring items was a loss of RMB 245 million, down 272.16% year over year. Both turned from profit to loss year over year, marking the first time the company has suffered a full-year performance loss since listing in 1997.

Yangtze Business Daily noted that Wandong Medical was originally a listed company under the Wu Guangming group from the Yuyue system. In 2021, Midea Group acquired a combined 29.09% equity interest in Wandong Medical held by Yuyue Technology and Wu Guangming and Yu Rong, becoming the controlling shareholder of Wandong Medical, and He Xiangjian became the company’s actual controller.

Regarding the decline in revenue in 2025, Wandong Medical stated that it was mainly due to the company’s overall marketing strategy adjustment. The company adhered to “move upward” and “move outward.” Internally, it leveraged centralized procurement projects to secure and strive for higher-end market share. Externally, it actively expanded international channels. However, because the delivery cycle for centralized procurement projects was longer than expected, domestic revenue was reduced compared with the same period of the prior year.

During the reporting period, among Wandong Medical’s main domestic sales markets, the operating revenues of North China, East China, Central and South China, and Southwest China were RMB 68.5013 million, RMB 159 million, RMB 204 million, and RMB 95.0483 million, respectively, down 68.32%, 34.59%, 41.66%, and 46.36% year over year. Only revenue in Northeast and Northwest regions increased, at RMB 168 million and RMB 161 million, respectively, up 87.52% and 34.81% year over year.

The annual report shows that in the domestic public hospital market, the number of bids won by Wandong Medical doubled. The market share increased by 10.23 percentage points year over year. However, given that the procurement, installation, acceptance, and payment collection cycle for large-scale medical equipment is relatively long, and also constrained by objective conditions such as hospital premises preparation and the progress of fiscal funding disbursement, the recognition of related revenue has reasonable timing lag. Therefore, the revenue in the current-period financial statements could not fully reflect the results of the bids won.

At the same time, in the private hospital market, affected by factors including the deepening of DRG/DIP medical insurance payment reform, private hospitals have become more cautious in capital expenditures, overall demand was hit, and revenue from this segment declined 55% year over year.

Nevertheless, compared with that, Wandong Medical’s overseas market growth momentum is strong. In 2025, Wandong Medical achieved operating revenue of RMB 360 million in regions outside mainland China, up 54.38%.

In particular, in the European market, Wandong Medical’s accumulated installed base of DR devices has exceeded 700 units. Of these, nearly 300 units are installed in Italy alone. The company has also continued to expand its product lineup for EU MDR certification.

In addition, in 2025 Wandong Medical newly opened more than 20 blank markets, including Thailand, Indonesia, the Philippines, India, Mexico, and Argentina. It added more than 60 new global customers, and its pace of globalization accelerated significantly.

Increase R&D and marketing efforts to support the transition

Deep participation in centralized procurement, which narrowed profit margins, became the main reason for Wandong Medical’s performance losses.

Wandong Medical stated that in fiscal year 2025, the company deeply participated in centralized procurement of medical equipment. To adapt to market changes, it optimized its marketing strategy in a timely manner. It successfully won imaging equipment projects through more competitive pricing proposals; the price adjustment had a certain impact on gross margin, resulting in a compression of net profit margins.

Yangtze Business Daily noted that in 2025, Wandong Medical’s core operating business—medical device sales—achieved operating revenue of RMB 1.215 billion, down 14.92% year over year. Gross margin was 26.59%, down significantly by 9.07 percentage points year over year.

Among major products, DR production volume and sales volume were 2,338 sets and 1,617 sets, up 71.28% and 15.42%, respectively. Production volumes of MRI, DSA, and CT were 179 units, 42 units, and 482 units, up 51.69%, 44.83%, and 86.1%, respectively, but sales volumes were 116 units, 22 units, and 281 units, down 11.45%, 51.11%, and 11.36% year over year, respectively.

Facing industry changes, in 2025 Wandong Medical continued to increase R&D investment. At the same time, it actively expanded overseas markets and strengthened marketing efforts for high-tier hospitals domestically, supporting the company’s strategic transition toward greater scale, higher-end positioning, and overseas expansion. However, this also led to pressure on net profit.

Data shows that in 2025, Wandong Medical’s total R&D investment was RMB 287 million, accounting for 21.3% of operating revenue. Of this, R&D expenses were RMB 263 million, up 59.28%. The main reasons were that the company continued to increase R&D investment; it optimized and adjusted the personnel structure, introduced high-end talent, and increased related investments such as materials for R&D projects for high-end products.

In 2025, Wandong Medical’s selling expenses were RMB 277 million, up 26.29%. The main reasons were adjustments to the structure of market and marketing personnel, the company’s introduction of high-end talent, and increases in travel and exhibition expenses related to expanding overseas markets.

However, from Wandong Medical’s perspective, the company’s 2025 performance was a phased reflection of the company proactively carrying out strategic adjustments and deep transformation amid a complex and ever-changing macro environment and industry cycle. The short-term fluctuations in performance were an inevitable result of the combined effect of external structural pressure and internal forward-looking planning, profoundly reflecting the company’s strategic choices and resource reallocation to pursue long-term high-quality development.

Of note is that on the same evening, Wandong Medical released an asset sale plan. Based on the company’s business planning adjustments, Wandong Medical plans to transfer 100% of its equity interest in Wanying, its wholly owned subsidiary, to Midea Imaging Technology (Shanghai) Co., Ltd., for RMB 48 million. The latter is a subsidiary controlled by Midea Group, the controlling shareholder of Wandong Medical.

It is understood that Wanying focuses on the research and development of core components such as superconducting magnets and gradient coils for 1.5T and 3.0T magnetic resonance systems. In 2024 and 2025, Wanying achieved operating revenue of RMB 14.743 million and RMB 9.7009 million, respectively; and net profit was a loss of RMB 5.8895 million and RMB 11.1995 million, respectively.

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