CMSC International: Mainland medical equipment industry performance is expected to bottom out and rebound, suggesting attention be paid to two main themes of domestic substitution and overseas expansion.

CMSC International released a research report stating that in the first half of 2025, the overall revenue of the mainland medical device industry decreased by 3.8% year-on-year, while the attributable net profit decreased by 12.8% year-on-year; non-GAAP net profit decreased by 14.5% year-on-year. In the second quarter, the quarterly revenue decreased by 5.5% year-on-year, the attributable net profit decreased by 20.3% year-on-year, and the non-GAAP net profit decreased by 25% year-on-year. The report sampled 129 medical device companies listed on the Hong Kong and A-share markets, and after analysis, it was found that about 53% of the companies achieved year-on-year revenue growth in the first half of the year, with 16% having a growth rate exceeding 20% and 37% having a growth rate in the 0-20% range. The report believes that after experiencing the double policy disturbances of the epidemic and domestic centralized procurement, the overall revenue and profit levels of the medical device industry are expected to bottom out and rebound. The report predicts that from the second half of 2025 to 2026, the mainland medical device industry will enter a new development stage. Driven by the dual engines of marginal improvement in internal policy environment and external market expansion, the sector's overall recovery trend is clear. The report recommends focusing on two main themes of domestic substitution and overseas expansion, short-term attention on undervalued targets with clear performance improvement, and long-term allocation to innovative-driven high-growth tracks. The report recommends paying attention to Shenzhen Mindray Bio-Medical Electronics (300760.SZ), Shanghai United Imaging Healthcare (688271.SH), MEDBOT-B (02252), APT Medical Inc. (688617.SH), and MGI Tech Co., Ltd. (688114.SH).