China Medical Technology: Limited Domestic Recovery, More Resilient Overseas Growth and Structural Segments

Overview

This report systematically reviews the performance of China's medical technology sector in 2025, the outlook for 2026, the impact of global companies in the Chinese market, and the operating guidance and catalysts for covered China medical technology companies. The core view is that the domestic market may have passed its worst phase, but a strong rebound is still uncertain; the equipment segment is supported by tender recovery and replacement stimulus, consumables demand is broadly stable but still affected by VBP, and IVD still faces policy and pricing pressure. By contrast, domestic companies' overseas revenue expansion remains resilient and is expected to continue growing faster than the China market in 2026.

Core views

UBS notes that in 2025, both global and domestic medical technology companies faced pressure on customer demand and pricing in China. IQVIA data show that the China medical technology market grew only 0.4% YoY in the first three quarters of 2025. In equipment, hospital procurement recovered in the first 11 months of 2025, with tender value up 13% YoY, but growth turned to a 3% YoY decline from July to November, clearly weaker than the 35% growth in the first half. In consumables, the high-value consumables market was basically flat in 9M25, while VBP coverage kept rising. Going forward, UBS prefers categories with high surgical-volume growth potential or categories where most of the price-cut risk has already been realized. In IVD, test-volume shocks may be stabilizing, but reagent pricing pressure could persist, so UBS remains cautious on 2026. Overseas, despite geopolitical and tariff challenges, Chinese companies are maintaining growth resilience through single-source procurement qualifications, inventory stocking, and supply-chain optimization.

Analysis framework

The report triangulates IQVIA market data, Joinchain hospital equipment tender data, WIND local government bond issuance data, government procurement website information, expert interviews, comparisons of medical service price catalogs across six provinces and cities, and 2026 operating guidance and UBS forecasts for covered companies to cross-check industry demand, pricing, policy, overseas expansion, and company-level catalysts.

Methodology notes

• Policy and pricing frameworkVBP

  Centralized volume-based procurement coverage and price-cut risk

  The report uses VBP coverage to assess future pricing downside for high-value and low-value consumables; orthopedic products with already high coverage are believed to have limited further downside risk from price cuts.

• Health insurance payment frameworkDRG/DIP

  Impact on inpatient volume, surgical volume, and testing volume

  The report believes that after full implementation of DRG/DIP, inpatient and surgical volumes are likely to grow moderately, but unnecessary testing and IVD demand will also be restrained.

• Tender analysis frameworkHospital procurement tender analysis

  Hospital equipment procurement tender value

  The report tracks equipment-side demand recovery through hospital equipment tender value and breaks it down by categories such as ultrasound, gastrointestinal endoscopy, CT, MRI, surgical robots, immunoassay analyzers, and gene sequencers.

• Expert interview frameworkExpert call takeaways

  Validation of channel inventory, testing volume, and price trends

  The report cites expert interviews to assess the potential impact of flexible endoscopy, testing volume in IVD subsegments, channel inventory, and standardized testing fees.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Mindray(300760.SZ)

  Covered company, Buy, PT Rmb248.00

  Strengths

  Overseas growth, domestic revenue recovery, and IVD rebound are the key supports.

  Weaknesses

  Net margin may remain under pressure, and the recovery in domestic IVD is still uncertain.

  Comparison

  Compared with companies focused on a single domestic market, it has stronger overseas exposure and a broader product lineup.

  Risks

  Domestic revenue recovery falls short of expectations, IVD policy pressure, and FX impact.

• United Imaging(688271.SH)

  Covered company, Buy, PT Rmb196.00

  Strengths

  About 50% overseas revenue growth and rising market share in China support revenue growth above 2025 levels.

  Weaknesses

  Gross margin and expense trends still need to be monitored.

  Comparison

  It is more of an equipment-side recovery play and a domestic substitution story in high-end imaging devices.

  Risks

  Insufficient equipment tender recovery, or VBP and pricing pressure worse than expected.

• New Industries(300832.SZ)

  Covered company, Buy, PT Rmb77.90

  Strengths

  Targets 5-10% domestic growth and 20-25% overseas growth, with net profit growth potentially slightly above revenue growth.

  Weaknesses

  IVD reagent pricing and testing volume are still subject to policy disruptions.

  Comparison

  Compared with traditional IVD companies, it relies more on overseas scale-up and share gains to offset domestic pressure.

  Risks

  Reagent price cuts are worse than expected, and overseas sales ramp-up is slower than expected.

• APT Medical(688617.SH)

  Covered company, Buy, PT Rmb349.00

  Strengths

  The ESOP implies a relatively high revenue CAGR, and high-growth segments such as electrophysiology and peripheral vascular offer potential.

  Weaknesses

  R&D and sales expenses may remain high, and net profit growth could lag revenue growth.

  Comparison

  It benefits more from surgical-volume growth and the scale-up of innovative interventional products.

  Risks

  Provincial VBP, EP contract renewals, PFA, and uncertainty in overseas certification progress.

• Yuyue Medical(002223.SZ)

  Covered company, Buy, PT Rmb49.70

  Strengths

  Overseas revenue growth targets exceed 30%, and new products such as CGM, PAP, AED, and wearable devices should add incremental contribution.

  Weaknesses

  Revenue mix and margin structure for new businesses are still in the ramp-up stage.

  Comparison

  Compared with hospital-based equipment companies, it has greater flexibility from consumer medical products and overseas business.

  Risks

  New product approvals or scale-up fall short of expectations, and overseas growth is below target.

• Lepu Medical(300003.SZ)

  Covered company, Neutral, PT Rmb16.90

  Strengths

  The aesthetic medicine business may become the main growth driver in 2026, and approvals for PDRN injections and Thermage equipment are potential catalysts.

  Weaknesses

  Traditional businesses are expected to be broadly flat, with growth relying more on new businesses.

  Comparison

  Compared with typical medical device names, it relies more heavily on an aesthetic medicine transformation.

  Risks

  Regulatory approvals are delayed, and aesthetic medicine revenue or net margin may disappoint.

• MicroPort MedBot(2252.HK)

  Covered company, Neutral, PT HK$21.40

  Strengths

  Pricing policy for surgical robot services and updates to the 15th Five-Year Plan may provide support.

  Weaknesses

  The commercialization and profitability path still needs validation.

  Comparison

  It is more of a long-term innovative device theme, with weaker short-term earnings visibility than mature equipment companies.

  Risks

  Robotic-assisted surgery scale-up is slow, and overseas strategy execution is weaker than expected.

• Weigao(1066.HK)

  Covered company, Buy, PT HK$7.00

  Strengths

  Management guides revenue and net profit growth of 4-8% and 3-5%, respectively, with growth drivers in orthopedics, intervention, medical packaging, and blood management.

  Weaknesses

  Medical device growth may be below 5%.

  Comparison

  A diversified business mix helps diversify the risk from price cuts in a single consumables category.

  Risks

  VBP price cuts are worse than expected, and share gains are insufficient.

• Eyebright(688050.SH)

  Covered company, Buy, PT Rmb104.00

  Strengths

  UBS forecasts 2026 revenue and net profit growth of 18% and 19%, respectively, with PRL/EDOF IOL sales and M&A progress as catalysts.

  Weaknesses

  Assumptions on IOL pricing, gross margin, and net margin are sensitive.

  Comparison

  Its ophthalmic consumables profile makes it different from the typical equipment cycle.

  Risks

  High-end IOL sales fall short of expectations, and the acquisition progress of Delta Medical (Chongqing) is uncertain.

Key data

• China medical technology market size9M25 YoY +0.4%IQVIA data show the industry was broadly flat.
• Revenue changes among A-share domestic companiesConsumables +7.6%; devices +0.8%; IVD -14.5%The period is 9M25, showing the most pronounced pressure in IVD.
• Hospital equipment tender value11M25 YoY +13%Joinchain data show equipment procurement recovered, but July to November was down 3% YoY, slower than the first half.
• Tender growth by device categoryUltrasound +42%; gastrointestinal endoscopy +40%; immunoassay analyzers -3%; gene sequencers -10%This reflects divergence in momentum across equipment subcategories.
• Special local government bonds for medical useRmb119bn in 2025, -36% YoYWIND data show a decline in local earmarked medical funding.
• Non-special local government bonds for medical useRmb1,718bn in 2025, -13% YoYMedical-related but non-earmarked bond issuance also declined.
• Central equipment replacement stimulusEstimated at Rmb15-20bn in 2025The report expects actual procurement may be delayed into 2026.
• High-value consumables market9M25 YoY +0.2%IQVIA data show the overall market was broadly stable.
• Chongqing surgical volume11M25 YoY +2%The number of hospital discharges was flat YoY, while surgical volume rose slightly.
• VBP coverage forecast2026: high-value consumables 61%; low-value consumables 41%This continues to increase from 2025 levels of 58% and 35%.
• Core laboratory testing market9M25 YoY -9%Immunoassay and clinical chemistry fell 14% and 11% YoY, respectively.
• Overseas revenue guidanceYuyue Medical 30%+; New Industries about 25%; Mindray double-digit growthThe report believes overseas growth may continue to outpace the China market.

Impact & implications

In investment terms, the report does not expect a broad-based strong rebound in China's medical technology sector. Instead, it emphasizes structural selection: on the equipment side, focus on the realization of replacement stimulus and the sustainability of tender recovery; on the consumables side, focus on surgical-volume growth, VBP risk release, and market share gains; in IVD, investors should be alert to pressure on testing volumes and reagent prices; at the company level, the report prefers names with overseas expansion, new product scale-up, domestic share gains, or marginal policy improvement.

Risks

• Medical device VBP price cuts are larger than expected, or market share gains are weaker than expected.
• Demand from the equipment replacement plan is weaker than expected, and the rollout of stimulus funding is delayed.
• The impact of medical anti-corruption efforts on hospital procurement and clinical use is greater than expected.
• Geopolitical risk affects the medical device supply chain, exports, and overseas access.
• Product development, registration approvals, and technological breakthroughs are slower than expected.
• IVD testing volume recovery is limited, and reagent pricing pressure lasts longer than expected.

What to watch

• The specific size, rules, and actual procurement rollout pace of the 2026 central medical equipment replacement stimulus.
• Whether hospital equipment tender value resumes consecutive growth in 2026, especially for ultrasound, gastrointestinal endoscopy, CT, MRI, and surgical robots.
• The increase in VBP coverage across high-value and low-value consumables, and the pricing impact on orthopedics, electrophysiology, and peripheral vascular categories.
• The subsequent impact of DRG/DIP, test-result interrecognition, and standardized testing fees on IVD testing volume and reagent prices.
• Whether overseas revenue growth for Mindray, New Industries, Yuyue Medical, and APT Medical is delivered as expected.
• Progress on new product approvals, CE/FDA certifications, contract renewals, M&A, and policy catalysts for covered companies.