As cost reduction and efficiency improvement become the main theme in the medical testing industry, leading ICL companies are seeking breakthrough solutions. Compared to peers, ADICON HOLDINGS (09860) has demonstrated stronger growth momentum during the industry downturn - with contract award amounts surging 106% year-on-year, significantly outpacing the industry average. What did they do right?

On August 22, ADICON HOLDINGS delivered its 2025 interim report card, which not only achieved significant growth in key business segments but also demonstrated exceptional risk resistance and growth resilience through diversified business layout and lean operational management, while peers faced profitability pressures. The value proposition of ADICON HOLDINGS extends far beyond traditional testing services.

**Diversified Business Resilience Emerges, New Growth Drivers Continue to Strengthen**

Since 2025, influenced by macroeconomic fluctuations and healthcare policy adjustments, the ICL industry has faced overall pressure. However, ADICON HOLDINGS effectively responded to uncertainties during the industry winter through its diversified business layout and resilient operational performance, demonstrating strong risk resistance capabilities.

During the period, the company's overall revenue was approximately RMB 12.7 billion. In a market environment where many peer companies experienced revenue declines exceeding 20%, ADICON still demonstrated strong operational resilience with stable performance.

Behind this solid performance lies ADICON HOLDINGS' more balanced business structure and more efficient strategic execution capabilities compared to peers. During the period, the company's co-construction business revenue increased 30% year-on-year, reaching a historic high with a four-year compound growth rate of 48%. This represents not merely quantitative growth, but the manifestation of deep cooperation model barriers.

During the period, the company's collaboration projects with multiple large tertiary hospitals intensively landed. This "deep binding" means the company has upgraded from a simple testing service provider to a strategic partner in hospital operational management, possessing high service barriers and strong customer stickiness. As the company continues to deepen strategic cooperation with quality medical institutions in the future, more influential benchmark projects will gradually land, consolidating the company's business advantages.

The CRO business also performed strongly, with revenue growing 18% year-on-year, simultaneously reaching a historic high and becoming the company's new business growth curve. During the period, the company not only consolidated its advantages in the diabetes field but more importantly occupied over 50% market share in the NASH (Non-alcoholic Steatohepatitis) golden track, while achieving breakthroughs in solid tumor research and development, demonstrating that the company's frontier diagnostic R&D capabilities have gained market recognition.

The specialized testing business segment achieved capability enhancement through strategic acquisitions, fully acquiring hematologic disease diagnostic leader Yuande Youqin and its industrial chain companies, directly importing core technologies, production capacity, and a batch of quality tertiary hospital customer resources, laying key groundwork for establishing differentiated competitiveness in segmented tracks in the future.

Simultaneously, the company achieved significant results in market expansion. During the reporting period, the company's successful bid quantity increased 51% year-on-year, with bid amounts surging 106% year-on-year, far exceeding the industry average growth rate. Compared to peer companies, ADICON HOLDINGS' newly formed bidding team demonstrated excellent market penetration capabilities, becoming important support for the company's counter-cyclical expansion.

Behind the company's rapid market expansion lies its extreme cost control optimization. During the reporting period, the company achieved significant cost optimization through lean management: reagent procurement costs decreased nearly 13% year-on-year, logistics cost per sample reduced approximately 4%, and clinical and pathology efficiency improved 11% and 6% respectively. This marks that its operational model has shifted from scale growth-driven to quality and efficiency-driven, providing sufficient confidence and profit margins in price competition.

**"AI+Healthcare" Advancing in Depth, Digital Intelligence Foundation Empowering the Future**

Driven by the digital wave, big data, artificial intelligence and other new-generation information technologies are developing vigorously and being widely applied. Using digital and intelligent means to enhance medical service levels and optimize patient treatment experiences has become the core direction of healthcare industry evolution. Multiple securities firms emphasize that "AI+Healthcare" is becoming an unstoppable trend and inevitable direction for industry development.

Against the backdrop of comprehensive acceleration in "AI+Healthcare" industrialization, ADICON HOLDINGS' business layout extends far beyond traditional testing services. With forward-looking strategic vision, the company keenly captured industry development opportunities and continuously promoted deep integration and application innovation of artificial intelligence technology in medical business scenarios.

Compared to peers, the company leads the industry in AI application implementation. In the first half of this year, the company achieved abundant results in AI technology applications. Its AI-assisted reading technology has achieved scale implementation, playing significant roles in key areas such as cervical cancer and reproductive genetics, with efficiency reaching 6-7 times that of manual work, completing nearly ten million assisted diagnoses, providing solid support for high-throughput, standardized testing services.

During the period, the company's intelligent assistant "Ai Xiao Yi" officially launched. This intelligent assistant provides doctors with one-stop services including intelligent consultation and report interpretation, reconstructing the doctor-patient service experience. Meanwhile, the company's AI-empowered diagnostic system also achieved upgrades, with the pathology report AI quality control system automatically correcting errors and the flow cytometry AI analysis platform generating reports within seconds, fundamentally "reengineering" the accuracy and speed of diagnostic processes.

While achieving AI technology breakthroughs, the company continues to strengthen digital infrastructure foundation. The new generation LIMS system has been stably operating in 32 subsidiaries and completed deployment in 18 new companies, expected to achieve full coverage in the second half of the year, significantly improving operational coordination efficiency. Master data management has initially integrated marketing data through multiple rounds of governance and standardization, and will complete master data platform construction within the year to fully support digital intelligence transformation.

Additionally, leveraging over twenty years of accumulated medical testing data, the company has constructed an enterprise-level data warehouse with strict security classification management. Through deep cleaning and modeling analysis, it has launched multi-dimensional data intelligence products for internal decision-making and external services. Currently, the company is actively promoting compliant commercialization of medical data assets, expanding cooperation ecosystems and innovation models, with this layout leading most peer companies.

**Summary**

Overall, as the ICL industry accelerates toward integration, industry patterns face restructuring, and competitive dynamics become increasingly intense, ADICON HOLDINGS demonstrates growth resilience superior to peers through its diversified business structure, lean operational capabilities, and leading AI layout.

Compared to peers, ADICON has deeper deployment in emerging business areas such as CRO and specialized testing, and also leads the industry in AI technology applications and data commercialization. Looking at long-term development, the company has clarified multi-dimensional growth paths in its latest five-year plan: using the general testing segment as the development foundation, deeply cultivating customer development and retention to consolidate the growth base; the specialized testing segment will anchor medical value and drive rapid growth through major projects; the CRO segment will seize industry opportunities to accelerate business expansion and contracting; the co-construction segment will upgrade supply chain and service capabilities to create differentiated competitive advantages. Meanwhile, the company will use mergers and acquisitions as growth wings, absorbing quality resources and accelerating integration and synergy across segments.

From an investment perspective, considering industry prospects, market position, and solid fundamentals, ADICON HOLDINGS has become one of the quality targets in healthcare digitalization that combines both certainty and growth potential, expected to create sustainable long-term returns for investors.