August China hospital-equipment bidding grew 5% year on year, with trade-ins and replacement demand underpinning continued momentum

Overview

The report tracks August 2026 bidding activity across China hospital equipment categories and assesses the implications for Mindray and United Imaging. Goldman Sachs finds that aggregate bidding growth remained positive, expects procurement momentum to continue, and argues that proposed VBP effects on the two companies should be limited.

Core views

Goldman Sachs reports that bidding value across nine major medical-device categories rose 5% year on year in August 2026, in line with its prior expectations. Growth was led by CT scanners, up 15% year on year, and MRI, up 28%, as trade-in programs rolled out more quickly. Patient-monitor procurement rose 42% year on year, accelerating from 25% in July, which the report attributes largely to replacement demand as equipment purchased during the pandemic reaches its renewal cycle. Goldman Sachs expects this positive bidding momentum to extend through September and the fourth quarter. The category detail was mixed. CT growth slowed from 34% year on year in July to 15% in August, while MRI growth slowed from 62% to 28%. DSA procurement improved to 21% year-on-year growth from a 9% decline in July. In contrast, endoscope procurement fell 16% year on year after rising 5% in July; ultrasound fell 11% after rising 9%; PET-CT fell 4% after a 427% increase; DR fell 3% after a 17% increase; and LINAC fell 16% after a 113% increase. The report therefore anchors its constructive sector view on broad positive aggregate bidding and strength in key imaging and monitoring categories rather than uniform growth across all device types. On VBP for large medical-imaging equipment, Goldman Sachs considers the effect on the two covered companies limited. Mindray has no exposure to the relevant large-imaging category. United Imaging is exposed only through PET-CT, PET-MR and LINAC; based on its experience with earlier provincial VBP programs, the company expects moderate price reductions and believes it can continue gaining market share. For United Imaging, 1H26 revenue was Rmb7.05bn, up 17% year on year and in line with expectations. Net profit was Rmb897mn, down 10% year on year but ahead of Goldman Sachs estimates because of improved expense and tax ratios; excluding foreign-exchange losses, profit would have risen 9%. Overseas revenue increased 54.5%, with expanding margins and strong Asia-Pacific and European demand, and the company projects more than 50% full-year overseas growth. Domestic revenue grew 8.5% alongside market-share gains, and Goldman Sachs expects an acceleration in the second half as hospital bidding recovers. High-end DSA, radiotherapy, MRI and molecular-imaging systems led equipment growth; recurring service revenue rose 20% on a global installed base above 40,000 units, while overseas service revenue rose 64%. Stabilized liquid-helium prices and ample electronic-component inventory support the report's expectation of stable full-year gross margins. United Imaging guides for revenue growth above 20% in 2026 and meaningful profitability improvement through cost control and FX hedging. Mindray reported 1H26 revenue of Rmb17.75bn, up 6% year on year, and net profit of Rmb4.80bn, down 5% year on year but up 8% excluding FX effects. The better-than-expected profit outcome reflected higher EBIT margins and a lower effective tax rate. Its IVD business showed robust growth: overseas revenue rose more than 20%, domestic second-quarter growth exceeded 10% on volume gains, and combined domestic market share reached 14%. Management expects volume growth to offset pricing pressure from unified testing-service policies. Domestic PMLS and imaging revenue declined by single digits, but international operations remained positive and channel inventory is expected to reach historical lows by year-end. The company identifies APT Medical and animal healthcare as fast-growing emerging businesses that could replace IVD as the main domestic growth driver. Despite domestic pricing pressure, Mindray aims for positive full-year domestic revenue growth and cites its roughly 5% global market share and cost-effective portfolio as support for its long-term objective of double-digit revenue growth over the next decade and a top-ten global-device-company position. Goldman Sachs remains Buy rated on both companies. For Mindray, it cites healthcare infrastructure construction, domestic substitution, overseas expansion potential, and multiple growth drivers; the stock trades below its five-year average forward P/E mainly because of policy risks. For United Imaging, it points to recovering China procurement, government funding, market-share gains and an increasing mix of service revenue that could improve gross margin. The report values Mindray at a Rmb249 12-month target using a two-stage DCF with 2% terminal growth and a 9.5% WACC; its stated price was Rmb165.2 as of 9 September 2026, implying 50.7% upside. United Imaging's Rmb182 target uses a two-stage DCF with a 9% discount rate and 2% terminal growth; its stated price was Rmb103.5, implying 75.8% upside.

Analysis framework

Goldman Sachs first tracks August bidding values across nine device categories and compares year-on-year changes with July to identify demand drivers. It then links the bidding trends and VBP exposure to company-specific operating updates, including revenue, profit, overseas growth, market share, service revenue, cost inputs and management guidance. Target prices for the two covered companies are based on two-stage discounted-cash-flow valuations.

Methodology notes

• Industry AnalysisSupply-demand framework

  Hospital-equipment bidding and procurement tracking by device category

  The report uses bidding values as a demand indicator, comparing August with prior periods and identifying trade-in programs and replacement cycles as drivers of equipment demand.

• Valuation methodsDCF (Discounted Cash Flow)

  Two-stage DCF valuation

  Goldman Sachs derives the stated 12-month target prices by discounting projected cash flows using explicit discount rates and a 2% terminal-growth assumption.

Asset mapping & comparison

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

• Mindray (300760.SZ)

  Covered company expected to benefit from procurement recovery, domestic substitution and overseas expansion.

  Strengths

  Market leadership, cost-effective products, IVD volume growth, overseas revenue growth above 20% in 1H26, and emerging growth businesses including APT Medical and animal healthcare.

  Weaknesses

  Domestic PMLS and imaging segments experienced single-digit declines, while domestic pricing pressures persist.

  Comparison

  Goldman Sachs notes Mindray's approximately 5% global market share as room for international expansion.

  Risks

  Further VBP-related ex-factory price reductions, slower penetration into top-tier Chinese hospitals, difficulty entering North America and Europe, patent lawsuits, and unexpected trade-policy changes.

• United Imaging (688271.SH)

  Covered company positioned to benefit from recovering China imaging procurement, market-share gains and service-revenue expansion.

  Strengths

  1H26 revenue growth of 17%, overseas revenue growth of 54.5%, high-end product momentum, a global installed base above 40,000 units, and rising service revenue.

  Weaknesses

  Reported net profit declined 10% year on year due to FX losses, though it would have risen 9% excluding them.

  Comparison

  The report cites market-share gains in China and expansion across more than 100 countries.

  Risks

  Chip supply-chain risk, raw-material risk including helium, a China macroeconomic downturn, and potential VBP risks.

Key data

• Total bidding value across nine major device categories+5% yoy in Aug-26Maintained positive growth and was consistent with Goldman Sachs expectations.
• CT procurement value+15% yoy in Aug-26Versus +34% yoy in Jul-26; supported by trade-in programs.
• MRI procurement value+28% yoy in Aug-26Versus +62% yoy in Jul-26; supported by trade-in programs.
• Patient-monitor procurement value+42% yoy in Aug-26Versus +25% yoy in Jul-26; attributed to replacement demand.
• United Imaging 1H26 revenue / net profitRmb7.05bn / Rmb897mnRevenue rose 17% yoy; net profit fell 10% yoy, or rose 9% excluding FX losses.
• Mindray 1H26 revenue / net profitRmb17.75bn / Rmb4.80bnRevenue rose 6% yoy; net profit fell 5% yoy, or rose 8% excluding FX impacts.
• Mindray target price and implied upsideRmb249 / 50.7%Buy rating; price of Rmb165.2 as of 09 Sep 2026 close.
• United Imaging target price and implied upsideRmb182 / 75.8%Buy rating; price of Rmb103.5 as of 09 Sep 2026 close.

Impact & implications

The report argues that recovering procurement, trade-in support and replacement demand should benefit China hospital-equipment suppliers into the fourth quarter. It sees Mindray as insulated from the relevant large-imaging VBP category, while United Imaging's more limited exposure is offset by expected moderate price reductions, potential market-share gains, overseas expansion and growing service revenue.

Risks

• For Mindray: further VBP-related cuts to ex-factory prices, slower penetration into top-tier Chinese hospitals, difficulty entering North American and European markets, patent-related lawsuits, and unexpected trade-policy changes.
• For United Imaging: chip supply-chain disruption, raw-material risk especially helium, a China macroeconomic downturn, and potential VBP effects.

What to watch

• Monthly China hospital-procurement data and the pace of equipment trade-in programs.
• Mindray's new-product launches, channel inventory reduction, domestic revenue trajectory and progress in emerging businesses.
• United Imaging's ultrasound-product launch, domestic bidding recovery, overseas growth, service-revenue mix and profitability improvement.