China Securities Co., Ltd.: The turning point has come for the medical device industry, and innovation, mergers and acquisitions, and international expansion have created a global leader.

date
10/08/2025
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GMT Eight
A-share investment opportunities: focus on the leading companies in various niche industries with potential for turning points in performance, strong internationalization capabilities, and good long-term growth prospects.
China Securities Co., Ltd. released a research report stating that, based domestically and expanding internationally, they are looking for China's global leader in medical devices: With the improvement of the competitiveness of domestic medical device companies, the main growth logic of the industry has gradually shifted from domestic substitution and penetration rate improvement to internationalization and technological innovation, leading to a reshaping of valuation. The international business space is broader, with many medical device companies experiencing high growth in overseas business, and the proportion of international business will exceed that of domestic business; there is a lot of improvement-type innovation in the device industry, with some Chinese medical device innovation products transitioning from follower to global leader, gradually emerging on the international stage; mergers and acquisitions expansion are important pathways for the growth of international medical device leaders, and the future will witness more industry mergers and acquisitions. The medical device sector has been on a continuous decline for the past four years, but this year is seeing a rebound; with the optimization of device collection policies, continuous improvement in equipment tender data, and the gradual reduction of channel inventory, the subsegments of the medical device sector are expected to gradually reach a turning point in performance from the second half of this year to next year. The main points of China Securities Co., Ltd. are as follows: Policy marginal improvement, industry turning point, and valuation recovery The medical device sector has been on a downward trend from 2021 to 2024, influenced by factors such as the improvement of medical compliance requirements and the pace of updating medical equipment from 2023 to 2024. Looking ahead to the second half of the year, the industry's performance turning point is gradually becoming apparent: 1) high-value consumables: bullish on long-term penetration rate improvement space, the optimization of collection policy benefits valuation recovery, and the turning point of collection clearing in various tracks is gradually being reflected; 2) medical equipment: starting from 24Q4, the speed of medical equipment bids has already shown a turning point, and it is expected that leading companies in 25Q3 will stabilize and rebound in performance, with some companies expected to achieve high growth on a low base, domestic leading products upgrading iteratively, expected to accelerate domestic substitution and internationalization; 3) IVD: Short-term pressure under the influence of multiple policy factors, it is expected that the chemical luminescence industry will stabilize in Q4 or next year, with still significant room for domestic substitution in the medium to long term. 4) low-value consumables: different products are in different stages, focusing on the progress of overseas manufacturing capacity construction of domestic companies and major customer cooperation; 5) household appliances: household respiratory equipment, CGM, and other fields have large market space, good layout, focus on changes in domestic consumer demand and the progress of internationalization of domestic household appliance companies. Against the backdrop of industry pressure, many listed companies are actively engaged in strategic transformation, gradually forming new growth curves Main directions of enterprise strategic adjustment include: 1) cost reduction and efficiency enhancement: maintaining profit margins through scale and automation production, optimizing production processes, and reducing raw material procurement costs; 2) tech... The translation has been abbreviated.