YIDU TECH (02158) has issued a profit alert on April 20, injecting a strong dose of confidence into the entire AI healthcare sector. The company anticipates achieving a net profit between 55 million and 70 million yuan for the 2026 fiscal year, marking its first full-year profit since its establishment 11 years ago. This is far more than just a financial turnaround for a single company; it represents a landmark event signaling the transition of China's AI healthcare industry from conceptualization to commercial realization. Vertical medical AI has finally completed the cycle from heavy investment in research and development to achieving self-sustaining profitability. The inflection point is now confirmed: a shift from deep losses to a zone of profitability.

Looking back over recent years, the AI medical field was once mired in skepticism over its high investment, low output, and difficulty in achieving profitability. The key drivers behind YIDU TECH's significant performance reversal are clear: deep integration of AI capabilities into its product portfolio, a substantial increase in new orders, and a qualitative improvement in both gross margin and operational efficiency. In the first half of the 2026 fiscal year, the company's adjusted EBITDA already reached 54 million yuan, doubling year-over-year, while losses narrowed by 72% compared to the same period last year. This profit inflection point arrived a full year earlier than anticipated. This interim report set the stage for profitability for the entire year. Recent project wins, such as the Beijing Cancer Hospital AI project (approximately 4.88 million yuan) and the Hainan Provincial Public Health Emergency Platform project (nearly 12.89 million yuan), provide solid business validation for this profitability. The former represents a benchmark implementation of a large medical AI model in a top-tier specialized cancer hospital, while the latter is an ongoing validation of provincial-level public health digital capabilities. A dual-engine growth model, driven by both hospital and public health sectors, has clearly taken shape.

The sector YIDU TECH is targeting does not involve marginal technological innovations but addresses one of the world's largest and most rigid demands: disease diagnosis, treatment, and health management. Total healthcare expenditure in China exceeds 8 trillion yuan and continues to grow. Factors such as an aging population, high incidence of chronic diseases, and the imbalance between supply and demand for high-quality medical resources mean that any AI tool capable of improving diagnostic efficiency, reducing misdiagnosis rates, and optimizing resource allocation holds immense commercial value. Unlike general SaaS or generic AI, medical AI faces extremely high barriers: data compliance, clinical interpretability, evidence-based medical justification, and regulatory approval. Each step requires long-term accumulation. YIDU TECH's YiduCore platform has processed nearly 7 billion medical records, covering over 1.3 billion patient encounters. Crucially, this is not fragmented data from single visits but complete, longitudinal data spanning the entire patient journey, including diagnosis, treatment, follow-up, and outcomes. For competitors starting from scratch, the financial and time cost required to catch up to this depth of data is nearly unimaginable. The core of its strategy is deepening its "underlying operating system," leading to the flywheel effect of YiduCore. If YIDU TECH is viewed as a "medical intelligence company," then YiduCore is its underlying operating system. This system has continuously evolved, from initially supporting data governance and specialized disease database construction to now spawning products like the clinical Copilot and the evidence-based intelligence system "Yidu Smart循." YiduCore achieves a flywheel effect, accelerating the cycle from "data to algorithms to real-world scenarios."

Taking "Yidu Smart循" as an example, this product curates over 30,000 clinical guidelines and more than 20 million high-quality medical articles. It collaborates with authoritative institutions like the People's Medical Publishing House to build an expert-reviewed knowledge base and can continuously track the latest research from top-tier journals such as NEJM, Lancet, and JAMA. Its core value lies in being "evidence-based for every statement, traceable for every conclusion, and explainable for every diagnosis and treatment," effectively curbing hallucinations common in large language models from the source. This capability addresses the "deep water" areas where general-purpose large models fall short. Currently, solutions built upon the "Yidu Smart循" evidence engine have been deployed in over 40 Class III Grade A hospitals, deeply involved in more than 500,000 clinical decision-making processes. YIDU TECH's hospital network now covers over 10,000 medical institutions and serves 17 of the global top 20 pharmaceutical companies. A prime example is the collaboration with Sun Yat-sen University Cancer Center. Starting from data governance cooperation in 2019, it evolved to large model applications by 2025, with over 100 AI application agents going live. This is not a single project but a decade-long, deep cooperative ecosystem, resulting in extremely high customer switching costs. YIDU TECH is positioned as a core beneficiary of the ongoing wave of Diagnosis-Related Groups (DRG) and Big Case Imitation (DIP) payment reforms in China. The core logic of this model is "same disease, same price," which pressures hospitals to control costs, improve efficiency, and enhance the quality of care. In this context, hospitals urgently need AI tools that can assist clinical decision-making, optimize treatment pathways, and avoid unreasonable costs. YIDU TECH's clinical Copilot and "Yidu Smart循" precisely provide evidence-based treatment recommendations, cost estimations, and pathway optimization, helping doctors make optimal clinical decisions within the constraints of DRG/DIP. This is not merely an efficiency tool but a "necessary infrastructure" for hospitals navigating payment reforms. As disease-based payment models deepen nationwide, YIDU TECH's solutions are likely to shift from "optional" to "essential," leading to a systematic increase in its market penetration and average revenue per user (ARPU).

From this profit inflection point, the path to a potential trillion-dollar valuation becomes visible. Looking ahead, its growth trajectory can be broken down into three layers: Deepening existing client relationships: Among the existing base of over 10,000 medical institutions, a significant number have not yet upgraded to the AI agent modules, presenting a potential for ARPU to increase several-fold per hospital. Expansion into new scenarios: Extending from the hospital end to public health, pharmaceutical companies, and personal health management. The B2B2C model of "Yidu Smart循" has already opened up possibilities—future value-added services like token-based billing and pharmaceutical academic promotion could bring high-margin incremental revenue. Global replication: YIDU TECH's technological capabilities and evidence-based system have the potential for expansion into other emerging markets, with overseas strategies already being planned. Referencing the valuation metrics of global medical AI leaders and other profitable comparable companies in Hong Kong, the sector's average PE ratio is around 30-45x. If YIDU TECH achieves the midpoint of its 2026 fiscal year net profit forecast (62.5 million yuan), a 45x PE multiple would imply a market capitalization of approximately 2.8 billion HKD based on earnings alone. However, the company's first-half revenue for FY2026, when annualized, already reaches about 720 million yuan, and it is on a high-growth trajectory. A more reasonable valuation should consider its data assets, customer network, AI product order growth rate, and order backlog (the order backlog for the big data platform and solutions business has exceeded 400 million yuan, with new orders increasing 19% year-over-year). Citigroup has set a target price of HKD 11, based on a sum-of-the-parts valuation, suggesting a substantial margin of safety. Furthermore, the company has conducted 34 share repurchases within the year, totaling nearly 240 million HKD, ranking first in repurchase intensity among Hong Kong-listed AI healthcare companies—a clear signal of management's confidence in intrinsic value. This profit alert from YIDU TECH should not be interpreted simply as a positive financial report. It announces that China's AI healthcare industry has moved beyond a phase of pure "technological romanticism" and entered a new era where "technological idealism" coexists with "commercial realism." From oncology specialties to provincial public health, from clinical evidence platforms to intelligent agent ecosystems, what YIDU TECH is building is a new industrial paradigm with AI as the core driver and the enhancement of medical value as the ultimate goal. Driven by the massive disease management market, the multi-billion-dollar medical AI sector, and the tailwinds from payment reforms, this newly profitable company stands at the starting point of its journey toward a significant market valuation. And profitability is just the beginning.