宣布三年股东回报计划;采购单降至港币14元;重申购买

lower PO to HKs14.0; reiterate BuyReiterateRating:BUYIPO:14.00HKD/Price:9.43HKD Net profit increased 4.7% YoY in 1H26 pressure, gross profit recorded RMB537.2mn, up 1.6% YoY, with the GPM expanding0.8ppt YoY to 27.4%.On the operating costs side, selling expenses rose22.9% YoY to RMB31.9mn, while administrative expense decreased by4.5%YoY to RMB209.8mn.In1H26,selling/admin expenses accounted for1.6%/10.7%of total revenue,respectively,compared with 1.3%/11.0% in 1H25. The company's net profit recorded RMB257.4mn,implying 4.7% YoY growth.Non-IFRS net profit grew 1.5% YoY to RMB266.5mn in 1H26Shareholder return plan for the next three years KeyChanges to utilize approximately RMB5oOmn annually to deliver returns to shareholders through share repurchases and dividend distributions during 2026-28. In 1H26, the companyrepurchased a total of 9.3mn shares for an aggregate amount of approximatelyHKs99.8mn. Operationally, hospitals of Hygeia recorded 2.3mn patient visits in 1H26,representing a 4.1% YoY growth. Among such visits, outpatient visits totaled 1.8mn, up4.5% YoY. In addition, Wuxi Hygeia Hospital officially commenced operations during1H26 and was included as a medical insurance-designated hospital in Wuxi urban area inJun-2026.Changshu Hygeia Hospital entered the preparatory stage for preopeninginspection.The hospital is designed to accommodate 800-1,200 beds.Lower PO to HKs14.0; reiterate Buy Merrill Lynch (Hong Kong)+85235088966ethan.cui@bofa.comDavid Li >:Research Analyst Merrill Lynch (Hong Kong)davidbo.li@bofa.comSandra Sun >>Research Analyst Merill Lynch (Hong Kong)sandra.sun@bofa.com Due to the ASP pressure, we lowertotal revenue forecast by6%/10%/14%.We lift GPMby0.7-0.9ppt and lower effective tax rateby3.0pptfor2026E-28E,respectively,based on 1Hfigures.Overall,we revise 2026/27/28-adjusted netprofit forecast by+4%/+1%/7%.We also raise dividend payout assumptions from 2026E onward, reflecting Hygeia'sshareholder-return plan. Overall, we lower DCF-derived PO to HKS14.0 from HK$16.0keeping our valuation methodology intact. We reiterate our Buy on Hygeia, driven by arecovery in patient volume and growing shareholder returns.2024A2025A2027E2028EEstimates (Dec) (CNY)2026E >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules.Refer to Other Important Disclosuresfor information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 7 to 9. Analyst Certification on page 4.PriceObjective Basis/Risk on page 4.13013209 sm Hygeia HealthcareiQprofileKey Income Statement Data (Dec)2024A2025A Healthcare Technology&Distribution Hygeia Healthcare is a leading oncology service company in China. It has a nationwide network of 17 oncology-focusedhospitals as of YE25. We have Buy rating on Hygeia Healthcare. It is a leading oncology service provider in China. Hygeia has built anationwide footprint of oncology-focused hospitals andradiotherapy centers. It could benefit from the rapidcancer incidence in China and the lack of medical resourcessupply especially in the lower-tier cities in China. Stock Data Price to Book Value0.7 Key Metrics Estimate changesExhibit 1: Estimate changes We lower revenue forecast for 2026E-28E Hygeia Healthcare (HYHHF) We use a discounted-cash flow (DCF) method to assess Hygeia's equity value. We arrive terminal growth rate, 80% equity-to-asset ratio, 4% risk-free rate, 7% equity-riskpremium, 5.0% cost of debt, and 13.8% derived cost of equity. We assume a beta of 1.4.Downside risks: regulation, failure in expansion, and unable to recruit/retain talent.Upside risks: better-than-expected patient volume and ASP, new expansions. AnalystCertificationI, Ethan Cui, hereby certify that the views expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that nopart of my compensation was, is, or will be, directly or indirectly, related to the specificrecommendations or view expressed in this research report. iQmethodsMeasuresDefinitions DenominatorTotal Assets Current Liabilities + ST Debt + Accumulated Goodwill AmortizationShareholders' EquitySalesN/AN/A DenominatorNet Income Quality of Earnings Cash Flow From OperationsCapexTax ChargeNet Debt = Total Debt - Cash & Equivalents DepreciationPre-Tax IncomeTotal EquityInterest Expense Denominator Diluted Earnings Per Share (Basis As Specified)Shareholders' Equity / Current Basic SharesCurrent Share PriceMarket Cap = Current Share Price × Current Basic SharesSales Price /