China Securities Co., Ltd.: Several companies poised for improved performance, optimistic about opportunities for structural investments in medical devices.

China Securities Co., Ltd. released a research report stating that in the short term, with policy easing, centralized procurement clearances, the expansion of new products and new businesses, and overseas deployment, it is expected that multiple leading medical equipment companies will reach a turning point in performance in 2026. It is recommended to seize the investment opportunities for performance valuation recovery, as well as investment opportunities in medical new technologies such as brain-computer interfaces and AI healthcare. The long-term investment opportunities in the medical equipment sector come from innovation, going global, and merger integration. The sector's innovation and internationalization capabilities are gradually being recognized, and valuations are being reassessed. The main points of China Securities Co., Ltd. are as follows: Medical equipment and upstream: The bidding situation has significantly improved this year, and the bidding prosperity in 2026 needs to be evaluated based on policies. The situation of each company varies, with some leading companies expected to achieve stable income growth or accelerate improvement. Some upstream companies in medical equipment are expected to accelerate growth driven by new businesses, new orders, and new customers. High-value consumables: Due to factors such as the differential execution time of centralized procurement policies, the turning points in the performance of companies in the sector will occur in an orderly manner. In 2026, some companies in the sector are expected to experience operational turning points due to some centralized procurement clearances or new product catalysis. Against the background of optimized centralized procurement policies, valuations and performance certainty in the sector are expected to be repaired. IVD: The sector's performance in 2026 is still influenced by multiple policies, but is expected to improve compared to 2025. The impact of value-added tax changes will be eliminated, industry inspection volumes will gradually stabilize, and the ex-factory prices of some products will still be affected by centralized procurement and inspection fees. Domestic manufacturers will continue to replace imports, overseas businesses with high growth and higher proportions will have stronger performance certainty. Low-value consumables: Looking ahead to 2026, it is expected that domestic business will maintain steady growth; as overseas production capacity of enterprises continues to come online and Sino-US tariffs ease, the release of overseas production capacity will contribute to incremental performance. Home medical equipment: In 2026, the industry is expected to continue its trend of steady growth, with domestic leading home medical equipment companies expected to accelerate their internationalization pace through building teams, investment, and acquisitions. Risk warning: Strict public procurement and cost control policies, stronger-than-expected industry competition, slower-than-expected device approval progress, and difficulty in judging external environmental changes.