Hospital Equipment Tendering Remains Weak in April; Domestic Brands Shift Focus to Overseas Markets

Overview

Goldman Sachs released its April 2026 tracking report on hospital equipment tendering in China. Data show that tendering value for the nine equipment categories tracked by Goldman Sachs declined 34% year-on-year, continuing the weak trend. Goldman Sachs maintains its prior view that broad-based industry improvement will not occur before the second half of 2026—and may be delayed until the first half of 2027. Against the backdrop of narrowing import substitution opportunities and cyclical softness in domestic tendering demand, domestic brands are accelerating overseas expansion efforts. Goldman Sachs maintains Buy ratings on both Mindray Medical and United Imaging Healthcare.

Core views

Equipment tendering remains persistently weak, with timing of recovery pushed back. In April 2026, tendering value for the nine medical equipment categories tracked by Goldman Sachs declined 34% year-on-year, extending the negative trend observed since December 2025 (down 16% year-on-year). Goldman Sachs attributes this weakness to both high base effects and weakening cyclical demand. As such, the report reaffirms its prior forecast: the industry inflection point will not arrive before H2 2026—and could be postponed to H1 2027. Patient monitors stand out as a rare bright spot. Amid broad weakness, patient monitors recorded over 20% year-on-year growth for two consecutive months. Goldman Sachs attributes this primarily to their relatively short replacement cycle—monitors installed en masse during the pandemic are now entering renewal phase—and to expanded eligibility under the government’s equipment upgrade subsidy program, which now covers small- and medium-sized devices, providing additional demand support. Both domestic and multinational players performed poorly; overseas markets take center stage. While multinationals outperformed domestic brands in March tenders, this trend did not continue in April—both groups performed poorly. Goldman Sachs notes that as incremental import substitution opportunities in China gradually narrow, and domestic hospital tendering demand remains in a cyclical trough, domestic brands face mounting pressure—and increasing incentive—to prioritize overseas market development. Stock view: Mindray Medical (Buy, target price RMB 247). Mindray is China’s leading medical equipment manufacturer, with coverage across monitoring, imaging, and in vitro diagnostics (IVD). Approximately 55% of its 2024 revenue came from China. Goldman Sachs remains optimistic about China’s healthcare infrastructure investment and import substitution trends, while also expecting continued overseas revenue growth, given Mindray’s low overseas market share and strong product value proposition. Its current valuation trades below its five-year average forward P/E, primarily weighed down by policy-related risks. Catalysts include a rebound in procurement activity, progress on the medical equipment upgrade program, and new product launches. Stock view: United Imaging Healthcare (Buy, target price RMB 172). United Imaging is China’s leading large-scale medical imaging equipment provider, with operations spanning over 100 countries worldwide. Goldman Sachs observes signs of recovery in China’s medical equipment procurement, increased government funding support, and sustained market share gains for the company. As this trend progresses, service revenue contribution is expected to rise, supporting margin improvement. United Imaging’s current share price sits near its post-IPO median valuation—but the report sees significant long-term growth potential, underpinned by anticipated revenue, gross margin, and net margin expansion. Catalysts include monthly hospital procurement data and the launch of its ultrasound product line.

Analysis framework

Goldman Sachs constructs a high-frequency indicator of industry health by continuously tracking monthly tendering data across nine categories of medical equipment in China: patient monitors, ultrasound, endoscopy, CT, MRI, PET-CT, DR, linear accelerators, and DSA. This report uses April data as a trigger, first reporting aggregate year-on-year change (-34%), then explaining the weakness through historical base effects and cyclical factors—and thereby adjusting the expected timing of industry improvement. Next, the report compares relative performance between domestic and multinational bidders using tendering data, concluding that import substitution headroom is narrowing domestically and inferring a strategic pivot toward overseas markets. Finally, the report maps these industry-level dynamics onto its two core covered companies (Mindray and United Imaging), incorporating each firm’s penetration rate in China, overseas expansion potential, product portfolio, and valuation level to deliver specific investment recommendations, target prices, and key catalysts. Valuation employs a two-stage DCF model.

Methodology notes

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Hospital equipment tendering data serves as a direct measure of industry demand

  The report gauges demand sentiment in the medical equipment sector by tracking month-on-month changes in tendering value—akin to using retail sales to gauge consumer sentiment. Rising tendering value signals strong hospital procurement intent; declining value indicates weakness.

• Industry/Industrial Analysis FrameworkVolume-price decomposition

  Aggregate change = volume effect × price effect; however, the report focuses more on whether a stock benefits from volume/price/structural shifts

  When analyzing why patient monitors bucked the trend, the report decomposes growth drivers into two components: increased demand volume driven by replacement cycles, and enhanced purchasing power stemming from broader eligibility under the equipment upgrade subsidy program (a price/structural factor)—illustrating a volume-price separation analytical approach.

• Industry/Industrial Analysis FrameworkPenetration S-curve

  Incremental import substitution headroom naturally narrows as penetration rises

  The report notes that domestic brands’ import substitution headroom in China is shrinking, as domestic equipment market share has already reached a relatively high level—making further substitution increasingly difficult and diminishing marginal upside—a hallmark of the latter stage of an S-curve.

• Company Fundamental & Financial Framework

  Overseas market expansion is critical for domestic leaders to break through domestic ceilings

  As domestic demand slows and import substitution tailwinds weaken, Goldman Sachs looks abroad, arguing that Mindray and United Imaging—leveraging cost-effectiveness and product capability—have the potential to replicate their domestic success overseas, unlocking a second growth curve.

• Valuation MethodologyDCF Discounted Cash Flow

  Two-stage DCF model: forecast period + terminal period

  The report applies a two-stage DCF model to value both Mindray and United Imaging: forecasting free cash flows for several years (discounted annually), then estimating terminal value (Stage Two) assuming a long-term growth rate of 2%, and summing both components to derive the target price.

• Valuation MethodologyPE/PEG valuation

  Current PE compared against historical mean to assess valuation positioning

  The report notes that Mindray’s current valuation trades below its five-year average forward P/E, while United Imaging trades near its post-IPO median P/E—using comparisons against historical valuation ranges to help assess whether shares are undervalued or overvalued.

Asset mapping & comparison

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

• Mindray Medical (300760.SZ)

  As China’s leading medical equipment manufacturer, it is directly impacted by domestic tendering weakness—but also stands to benefit from the logic of overseas expansion

  Strengths

  Leader in import substitution; diversified product portfolio (monitoring, imaging, IVD); low overseas market share with high-value products; 55% of 2024 revenue from China (significant growth runway)

  Weaknesses

  Valuation weighed down by policy risk; trades below five-year average forward P/E

  Risks

  1) Further VBP-driven price cuts on certain products; 2) Slower-than-expected penetration into Tier-3 hospitals in China; 3) Difficulty entering North American and European markets; 4) Patent litigation risk; 5) Sudden shifts in trade policy

• United Imaging Healthcare (688271.SS)

  As China’s leading large-scale imaging equipment provider, it benefits from recovering medical equipment procurement, increased government funding support, and continuous market share gains

  Strengths

  Leader in large-scale imaging equipment import substitution; global presence across 100+ countries; rising service revenue improving gross margins; valuation at post-IPO P/E median (upside potential)

  Risks

  1) Chip supply chain risk; 2) Raw material risk (especially helium); 3) China’s macroeconomic slowdown; 4) Potential VBP risk

Key data

• YoY Change in Tendering Value for Nine Equipment Categories, April 2026-34%Continuing weakness; YoY decline widened from ~-20% in March
• YoY Growth Rate for Patient Monitors (Past Two Months)>20%Maintained double-digit positive growth for two consecutive months—the sole bright spot
• Mindray Medical Target PriceRMB 247Based on two-stage DCF; WACC = 9.5%; terminal growth rate = 2%
• United Imaging Healthcare Target PriceRMB 172Based on two-stage DCF; discount rate = 9%; terminal growth rate = 2%
• Mindray Medical China Revenue Share (2024)55%China remains the primary market, though overseas revenue growth is faster
• United Imaging Healthcare Number of Countries Covered GloballyOver 100A globally established sales network

Impact & implications

Goldman Sachs believes persistent softness in Chinese hospital equipment tendering data implies near-term pressure on industry fundamentals, and equipment manufacturers reliant on the domestic market will face slower revenue growth. However, against this backdrop, the report concludes that narrowing import substitution headroom and subdued domestic demand will compel leading domestic firms to accelerate overseas expansion—where international operations are poised to become a new growth engine. For Mindray and United Imaging, although domestic tendering remains weak, both benefit from substantial overseas expansion potential, competitive product value propositions, and supportive policies (e.g., equipment upgrade initiatives), preserving their long-term growth narratives—hence Goldman Sachs maintains its Buy ratings.

Risks

• Mindray faces risks including further VBP-driven factory price cuts, slower-than-expected Tier-3 hospital penetration, difficulty entering North America and Europe, patent litigation, and sudden trade policy changes
• United Imaging faces risks including chip supply chain constraints, raw material exposure (e.g., helium), China’s macroeconomic slowdown, and potential VBP exposure

What to watch

• Future monthly hospital equipment tendering data in China
• Progress of the medical equipment upgrade program
• New product launch cadence for Mindray and United Imaging (e.g., United Imaging’s ultrasound product line)
• Recovery trajectory of procurement activity