WORK Medical Bets on AI Analyzer to Capture Key China Market

NEW YORK, NY – December 29, 2025 – WORK Medical Technology Group LTD (NASDAQ: WOK) is making a significant strategic push into China's booming artificial intelligence healthcare sector, signing an exclusive distribution deal for its new AI-powered blood cell analyzer in the country's economically vital eastern region. The agreement tasks distributor Shanghai Benke Medical Technology Co., Ltd. with achieving a minimum of RMB 10 million (approximately US$1.4 million) in sales for the device in 2026.

This move represents a critical test for WORK Medical, a company navigating a challenging financial period while attempting to pivot towards high-tech, higher-margin medical devices. The newly approved AI-Automated Blood Cell Morphology Analyzer, model CM-B600, is the centerpiece of this transformation, and its performance in the competitive East China market—comprising Jiangsu Province, Shanghai, and Zhejiang Province—will be a key indicator of the strategy's success.

A New Generation of Diagnostic AI

The CM-B600, developed by WORK Medical's subsidiary Hunan Saitumofei, aims to revolutionize the traditionally labor-intensive process of blood smear analysis. The device received its Class II medical device manufacturing approval from Chinese regulators in November 2025, with production slated to begin in the first half of 2026.

Boasting a high throughput capacity of up to 150 samples per batch, the system promises an average detection time of no more than three minutes per slide. It integrates a suite of automated features, including an optical imaging system, barcode scanning, and automated oil-immersion, to minimize manual intervention. According to the company, the analyzer achieves a classification accuracy of 90% or higher for key white blood cells and can identify 17 distinct subtypes, offering a level of detail that could significantly enhance diagnostic capabilities. It also performs detailed morphological analysis of red blood cells and platelets.

Interestingly, there appears to be a nuanced approach to its core technology. While some company materials have pointed to the use of powerful deep-learning algorithms, common in advanced image recognition, other statements have highlighted "non-deep-learning algorithms" to emphasize the system's high interpretability. This suggests a hybrid approach, potentially balancing the raw analytical power of deep learning with more transparent models that allow clinicians to better understand the AI's diagnostic reasoning—a crucial factor for building trust and ensuring clinical validation.

Company CEO Shuang Wu described the device as a platform that "integrates cutting-edge AI technology into traditional medical testing," evolving it into a "fully automated, standardized, and remotely accessible core testing platform." This vision underscores the goal of not just automating a task, but creating a new, more efficient workflow for modern laboratories.

Tapping Into China's AI Healthcare Boom

WORK Medical's timing could not be more opportune. The company is entering a Chinese AI diagnostics market that is experiencing explosive growth. Market analysts project the sector to expand from US$125.8 million in 2024 to nearly US$500 million by 2030, representing a compound annual growth rate (CAGR) of over 25%. This surge is fueled by several powerful trends, including a national push to modernize healthcare, an aging population demanding more advanced diagnostics, and a persistent shortage of skilled pathologists and lab technicians.

The Chinese government has been a key enabler of this growth. Initiatives like "Healthy China 2030" and "Internet + Healthcare" have created a fertile ground for innovation. More specifically, the National Medical Products Administration (NMPA) has streamlined the regulatory pathway for AI-powered medical devices. In 2022, the NMPA released comprehensive guidelines for the review and registration of AI software, and as of mid-2024, it had already approved 92 advanced Class III AI-powered medical devices. This clear regulatory support is designed to accelerate the integration of technologies like the CM-B600 into clinical practice.

The choice of the Yangtze River Delta as the initial launch market is also highly strategic. As one of China's wealthiest and most technologically advanced regions, it hosts a high concentration of top-tier hospitals and medical centers that are often early adopters of innovative technology.

A High-Stakes Pivot

For WORK Medical, the launch of the CM-B600 is more than just a new product release; it is a high-stakes bet on the company's future. The firm has faced significant financial headwinds recently. For its 2024 fiscal year ending September 30, net revenue fell 15.2% to $11.5 million, largely due to a sharp decline in demand for its lower-margin mask products. This resulted in a net loss of $3.5 million for the year.

The company's stock has reflected these challenges, trading near its 52-week low and prompting reverse stock splits to maintain its Nasdaq listing. In response, leadership has been vocal about a strategic transformation away from commoditized goods and towards innovative medical devices. Sales of its non-mask medical devices did increase by 17.7% in fiscal 2024, providing a glimpse of a potential path forward.

The RMB 10 million sales target for the CM-B600 in its first year is a tangible benchmark for this pivot. While a modest figure relative to the multi-billion-dollar Chinese medical device market, achieving it would provide crucial validation for the company's new direction and demonstrate a return on its R&D investment. The fact that its distributor, Shanghai Benke, has committed to a RMB 1 million prepaid performance bond suggests a degree of shared confidence in the product's market potential.

Navigating a Crowded Field

Success is far from guaranteed. The hematology analyzer market is mature and highly competitive, dominated by global giants like Sysmex Corporation and Beckman Coulter, as well as strong domestic players like Mindray. These companies have extensive sales networks, established reputations, and sophisticated product portfolios of their own.

WORK Medical will need to convince laboratories that the CM-B600's specific advantages—its unique blend of speed, detailed analysis, and AI-driven workflow—justify a switch or new investment. Its performance in the demanding clinical environments of Shanghai and its surrounding provinces will be closely watched by the industry.

This distribution agreement marks the first critical step in a much larger ambition. WORK Medical views the East China launch as a template for a broader national rollout and, eventually, international expansion. The success or failure of the CM-B600 in this initial phase will likely determine the trajectory of the company's strategic pivot and its ability to carve out a niche in the next generation of medical diagnostics.