Wantong Medical 2025 Annual Report Analysis: Net Loss of 228 Million Yuan, Operating Cash Flow Plummets 215.44% Year-over-Year

Operating Revenue: Down 11.64% Year-over-Year, Structural Adjustment Brings Short-Term Pressure

In 2025, the company achieved operating revenue of 1.347 billion yuan, down 11.64% year-over-year from 1.524 billion yuan in the same period last year. In terms of revenue structure, the medical device sales revenue in this period was 1.151 billion yuan, down 14.40% year-over-year; labor and service revenue was 0.64 billion yuan, down 23.20% year-over-year.

The decline in the company’s operating revenue is mainly due to the short-term effects of marketing strategy adjustments: internally, by seizing market share in the mid-to-high-end segment through centralized procurement (collective purchasing) projects, but the delivery cycle of these projects has been longer than expected, resulting in a phase-down in domestic revenue; externally, the company actively expanded international channels, with export revenue increasing by 54.38% year-over-year, but early-stage overseas market investments have not yet generated scalable revenue contributions. Quarter-by-quarter data shows that the company’s operating revenue declined each quarter, with only 158 million yuan in the fourth quarter—down significantly 57.5% from 373 million yuan in the first quarter—reflecting phased market demand pressure.

Profitability Indicators: Turned From Profit to Loss, Profitability Drops Sharply

Net Profit and Net Profit After Non-recurring Items

In 2025, the net profit attributable to shareholders of the listed company was -2.28 billion yuan. Compared with the profit of 1.57 billion yuan in the prior year, it turned into a loss, representing a decline of 244.81%. Net profit after deducting non-recurring gains and losses was -2.45 billion yuan, compared with a profit of 1.42 billion yuan in the prior year, representing a decline of 272.16%.

Quarter-by-quarter data shows that the company’s profitability deteriorated steadily: net profit was 0.35 billion yuan in the first quarter, dropped to 0.16 billion yuan in the second quarter, incurred a loss of 0.79 billion yuan in the third quarter, and losses further widened to 2.01 billion yuan in the fourth quarter. The full-year loss was mainly concentrated in the second half. The company’s losses mainly come from two aspects: first, increased strategic investments, including participation in centralized procurement which compressed gross margin, high-intensity R&D investment, and the introduction of high-end talent leading to higher compensation expenses; second, weak market demand. Affected by the reform of DRG/DIP medical insurance payment methods, private hospitals have become more cautious in capital expenditures, causing the relevant business revenue to decline 55% year-over-year.

Earnings Per Share

In 2025, basic earnings per share were -0.32 yuan/share, compared with 0.22 yuan/share in the same period last year; basic earnings per share after excluding non-recurring items were -0.35 yuan/share, compared with 0.20 yuan/share in the same period last year. The sharp decline in earnings per share is directly related to the company’s net profit turning from profit to loss, reflecting a significant decrease in the level of profit that ordinary shareholders can benefit from per share.

Expenses: All Three Expense Categories Rise, Strategic Investment Drives Up Costs

In 2025, the company’s total period expenses were 6.394 billion yuan, up substantially 100.3% year-over-year from 3.192 billion yuan in the same period last year, and sales expenses, management expenses, and R&D expenses all showed significant growth.

Sales Expenses: Up 26.29% Year-over-Year

In 2025, sales expenses were 0.277 billion yuan, up 26.29% year-over-year from 0.219 billion yuan in the same period last year. The increase in expenses mainly stems from two aspects: first, personnel structure adjustments—introducing high-end market talent increased compensation expenses; second, expanding overseas markets, leading to higher related travel and exhibition expenses. The growth in sales expenses reflects the company’s strategic investment in market expansion, aiming to enhance brand influence and market share, but it has created some short-term pressure on profits.

Management Expenses: Up 85.71% Year-over-Year

In 2025, management expenses were 0.129 billion yuan, up 85.71% year-over-year from 0.070 billion yuan in the same period last year. The main reasons for the increase include: first, the introduction of high-end management talent, which increased compensation expenses; second, to improve product quality, third-party testing and inspection expenses increased. The sharp increase in management expenses reflects the company strengthening internal management and quality control, which helps improve operational efficiency and product competitiveness, but temporarily raised operating costs in the short term.

R&D Expenses: Up 59.28% Year-over-Year

In 2025, R&D expenses were 0.263 billion yuan, up 59.28% year-over-year from 0.165 billion yuan in the same period last year. The increase mainly comes from continuously increasing R&D investment, including tackling “bottleneck” technologies such as helium-free magnetic resonance imaging, laying out next-generation intelligent imaging technology, and introducing high-end R&D talent and increasing material input for high-end product R&D projects. The company’s R&D investment intensity continues to rise, with total R&D spending accounting for 21.30% of operating revenue, higher than the industry average, helping accumulate core momentum for the company’s transformation and breakthrough toward the high-end market.

R&D Personnel: Team Size Expands, High-End Talent Concentrates

In 2025, the number of the company’s R&D personnel increased to 453. The proportion of R&D personnel in the company’s total workforce rose to 37.3%, up somewhat compared with the same period last year. In terms of educational background, among R&D personnel there are 18 PhD candidates, 200 master’s degree holders, and 212 undergraduates; the proportion of high-quality talent exceeds 95%. In terms of age structure, there are 202 R&D personnel aged 30–40, accounting for 44.6%; 119 aged 40–50, accounting for 26.3%, forming an R&D team centered on young and middle-aged backbones. The expansion in the scale of R&D personnel and optimization of the structure provide a solid talent foundation for the company’s technological innovation and product upgrades.

Cash Flow: Operating Cash Flow Turns Negative, Cash Flow Pressure Becomes Prominent

Net Cash Flow from Operating Activities

In 2025, net cash flow from operating activities was -2.52 billion yuan, while it was 2.18 billion yuan in the same period last year; it sharply fell by 215.44% year-over-year, shifting from net inflow to net outflow. The deterioration in cash flow is mainly due to increased payments for inventory procurement under centralized procurement projects, as well as an increase in cash outflows such as payments for employee salary and benefits resulting from personnel structure adjustments. The sharp decline in operating cash flow reflects the short-term funding pressure the company faces during its strategic transformation and the need to pay attention to the subsequent improvement in cash flow.

Net Cash Flow from Investing Activities

In 2025, net cash flow from investing activities was 1.75 billion yuan, compared with -15.36 billion yuan in the same period last year, representing a substantial year-over-year increase of 111.42%. The improvement in cash flow is mainly because redemption of maturity during this period increased cash inflows from investing activities, as the company redeemed principal-protected financial products and time deposits that had not yet reached maturity at the end of the previous year. Turning investing cash flow positive brought the company a certain amount of funds returning, alleviating part of the funding pressure.

Net Cash Flow from Financing Activities

In 2025, net cash flow from financing activities was -0.97 billion yuan, compared with -0.96 billion yuan in the same period last year, roughly flat year-over-year. The net cash outflow from financing activities was mainly due to cash dividends of 0.91 billion yuan and other cash payments related to financing activities of 0.36 billion yuan (mainly stock repurchase payments). The company’s financing activities are dominated by cash outflows. In the short term, it has not conducted large-scale external financing, and its funding sources rely mainly on cash inflows from operating activities and investing activities.

Facing Risks: Multiple Challenges Coexist, Strategic Transformation Is a Long Road

Dependence on Core Technologies and Supply Chain Risks

Some of the company’s high-end core components and technologies are still constrained by a limited number of suppliers. Global geopolitical fluctuations and the rise of trade protectionism pose threats to supply chain security. Such dependence not only increases costs, but also makes the company’s product iteration pace more susceptible to fluctuations in the international environment, with both the depth and breadth of domestic substitution still needing improvement.

Market Competition and Price Pressure

High-end markets have strong barriers to entry, while mid-to-low-end markets fall into homogeneous price competition due to government centralized procurement, severely compressing the industry’s overall profit margins and affecting companies’ long-term R&D investment. Meanwhile, policy measures such as reforms in medical insurance payment methods and centralized volume-based procurement prompt hospitals to focus more on the cost and benefit over the full lifecycle, raising higher requirements for the company’s comprehensive service capabilities.

Regulatory and Market Access Barriers

To enter mainstream markets such as Europe and the United States, it is necessary to pass stringent certifications such as FDA and CE-MDR. The process is lengthy and costly, and clinical data requirements are becoming increasingly strict. Data privacy protection regulations (such as GDPR) also bring compliance challenges for data training and cloud service deployment of AI products.

Clinical Trust and Brand Building

In the high-end market, building trust among clinical experts is a systematic endeavor that requires long-term strategic resolve, deep research investment, and sustained academic cultivation. The company’s brand recognition in the high-end market still needs to be improved, and it must establish brand advantages gradually through technological innovation and clinical validation.

Innovation Chain and Industrial Chain Synergy

At present, the connections between the company’s innovation chain and various links of the industrial chain are not tight enough, and the efficiency of resource integration and information sharing is not high, limiting the incubation and industrialization speed of major innovation projects. It is necessary to further strengthen the integration of industry, academia, research, and medicine to build a more efficient innovation ecosystem.

Executive Compensation: Core Management Salaries Are Stable, Performance-linked Mechanisms Need Optimization

In 2025, the Chairman Wang Jianguo’s pre-tax remuneration received from the company during the reporting period was not disclosed. The Directors and President Song Jinsong’s pre-tax remuneration was 1.9028 million yuan; Vice President Jing Xiaoqian’s pre-tax remuneration was 1.3567 million yuan; Vice President Huang Jiaxiang’s pre-tax remuneration was 142.5 million yuan. The Chief Financial Officer is concurrently held by Jing Xiaoqian, and his pre-tax remuneration was 1.3567 million yuan. The compensation of the core management team is relatively stable, but as the company turned from profit to loss, it indicates that the mechanism linking compensation to performance needs further optimization to better motivate management to improve the company’s operating performance.

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Responsible editor: Xiaolang Kuaibao