KingMed Is a Leading Independent Clinical Laboratory With Long-Term Tailwinds

KingMed is China's largest independent clinical laboratory in terms of clinical testing revenue. From 2016 to 2023, its revenue grew at a compound annual growth rate of 14.9%. It aims to deepen its network by investing in self-operated laboratories and codeveloping labs with hospitals or medical institutions. Given China's low ICL penetration rate of around 7% compared with around 35%-65% in other established markets such as Japan, Europe, and the United States, we believe that KingMed can still enjoy the long-term secular tailwinds of increasing outsourced testing demand. Our projected five-year revenue CAGR is 6.1%.