CITIC Securities: A turning point is approaching for the medical equipment sector, and there are opportunities for performance and valuation improvement for individual stocks by 2026.

The research report of CITIC Securities stated that a turning point is coming for the medical equipment sector, and there are opportunities for performance and valuation recovery in individual stocks in 2026. It is recommended to focus on companies that will experience accelerated growth in 2026 compared to 2025, thereby potentially achieving a double increase in performance and valuation. In 2026, for A shares in the medical equipment sector, it is advised to focus on investment opportunities related to performance recovery and overseas expansion, while for Hong Kong stocks, it is recommended to pay attention to the sector effects brought by the listing of several high-quality medical equipment companies, as well as opportunities for profit release and undervalued positioning in leading companies in the medical equipment sub-sector. Long-term investment opportunities in the medical equipment sector come from innovation, overseas expansion, and mergers and acquisitions. The sector's innovativeness and internationalization capabilities are being recognized, and valuations are being reassessed. After the surge in the innovative drug sector, the medical equipment sector is gradually gaining recognition for products with globally competitive improving and breakthrough innovations. There are also companies actively expanding their strategic second growth curve and achieving high overseas business growth, leading to an increase in valuations. It is recommended to continue to focus on the innovative medical device race with large market space and low domesticization rate, as well as investment opportunities in mergers and reorganizations, brain-machine interfaces, AI healthcare, surgical robots, exoskeleton robots, and other thematic directions. Focus should be on the clinical, registration, scaling, and overseas aspects of innovative medical devices, such as PFA, RDN, and TAVR products. There is potential for stocks with multiple catalysts to increase several times, and in the future, AI healthcare, brain-machine interfaces, and others are likely to become new technology directions of interest for investors.