Medical Equipment Bid Amount Turned Positive Year-over-Year; Industry Recovery Signals Emerge

Overview

This report tracks bidding data for nine categories of medical equipment in China, showing that the total bidding amount in May 2026 increased marginally by 0.1% year-over-year, ending five consecutive months of year-over-year declines since December last year. Goldman Sachs believes this aligns with prior expectations that the industry will transition from moderate year-over-year decline to moderate year-over-year growth, and anticipates a more pronounced recovery in the second half of 2026. The report focuses on analyzing the market performance and financial prospects of Mindray Medical and United Imaging Healthcare, assigning a Buy rating to both.

Core views

At the industry level, May bidding data showed a turning point, with the total amount for nine equipment categories turning positive year-over-year. By equipment type, CT, MRI, and LINAC recorded positive growth in May year-over-year. While patient monitoring systems, which had maintained positive growth previously, failed to sustain strong momentum, institutions hold a constructive view on future bidding data improvements for monitoring systems as equipment purchased during the epidemic period enters an update cycle. At the company level, United Imaging Healthcare's bidding value grew 9% year-over-year for the first five months of the year, the only company among its main competitors (including GEHC, Siemens, Philips, and Neusoft) to achieve positive growth. This is primarily due to stable market shares in CT and MRI segments and increasing shares in categories such as DSA and LINAC. The newly announced equity incentive plan requires annual revenue growth exceeding 20% for 2026-2028. Institutions' current forecast is slightly below this guidance at 19.3%. Mindray Medical's revenue in China declined 11% year-over-year in Q1 2026, while overseas revenue grew 16% year-over-year (+20% in USD terms). Its emerging businesses saw rapid growth both domestically and overseas. Although PMLS and medical imaging businesses in the China market are still in the destocking process (the company guides this process to end in Q2 2026), the IVD business has improved. Coagulation and immunoassay businesses both grew approximately 10% year-over-year. Mindray's core IVD business (immunoassay, biochemistry, coagulation) average market share increased from 10% in the first half of 2025 to 12% by the end of 2025, and further rose to 13% in Q1 2026.

Analysis framework

Institutions track industry sentiment using high-frequency bidding data, identifying industry turning points through volume-price decomposition and year-over-year changes. In company analysis, growth logic is verified by combining market share changes, revenue geographic segmentation, and business line performance. Regarding valuation, a two-stage DCF model is applied to both companies; target prices are derived by combining terminal growth rates and WACC assumptions, comparing current valuation levels with historical averages to assess investment attractiveness.

Methodology notes

• Valuation MethodDCF Cash Flow Discounting

  Two-stage DCF Valuation Model

  The report uses a two-stage DCF model to calculate target prices, assuming a terminal growth rate of 2% and WACC of 9.5% (Mindray) or discount rate of 9% (United Imaging), discounting future cash flows to present value to evaluate reasonable stock prices.

• Industry/Industrial Analysis FrameworkSupply and Demand Framework

  Tracking Industry Demand via Bidding Data

  Reflecting downstream demand sentiment through year-over-year changes in hospital equipment bidding amounts and quantities to determine if the industry has bottomed out and rebounded.

• Competition and Strategy FrameworkMoat / competitive advantage

  Market Share Change Analysis

  Analyzing companies' bidding performance relative to main competitors and market share shifts to assess whether competitive advantages are expanding, such as United Imaging's stable shares in CT/MRI and increasing shares in DSA/LINAC.

Asset mapping & comparison

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

• Mindray Medical (300760.SZ)

  Beneficiary

  Strengths

  Double-digit overseas revenue growth,持续提升 core IVD business market share, diverse product lines

  Weaknesses

  Domestic PMLS and medical imaging businesses still in destocking, China revenue declined in Q1 2026

  Comparison

  More diversified business mix and higher overseas proportion compared to United Imaging

  Risks

  Volume-based procurement price cuts, penetration into top-tier hospitals below expectations, difficulties entering overseas markets, patent litigation, trade policy changes

• United Imaging Healthcare (688271.SS)

  Beneficiary

  Strengths

  Best bidding performance among competitors, stable CT/MRI shares, increasing DSA/LINAC shares

  Weaknesses

  Domestic bidding demand still in early recovery stage, forecasts slightly below company equity incentive guidance

  Comparison

  More focused on large-scale imaging equipment compared to Mindray, greater domestic growth elasticity

  Risks

  Chip supply chain risks, raw material risks (especially helium), macroeconomic downturn, potential volume-based procurement risks

Key data

• May 9-category Equipment Bidding Amount YoY+0.1%First time positive since last December
• United Imaging Healthcare First 5-Month Bidding Value YoY+9%Only positive growth among main competitors
• Mindray Medical Q1 2026 Overseas Revenue YoY+16%+20% in USD terms
• Mindray Medical Core IVD Market Share13%Q1 2026 data
• Mindray Medical Target Price247 yuan12-month target price
• United Imaging Healthcare Target Price172 yuan12-month target price

Impact & implications

The turnaround in bidding data indicates initial recovery in the demand side of the industry, benefiting leading equipment manufacturers. United Imaging Healthcare's logic of increasing domestic market share is validated by data, and the equity incentive targets demonstrate management's confidence in future growth. Although Mindray Medical faces short-term pressure domestically, it shows strong overseas growth and increasing IVD market share, preserving long-term growth drivers. Institutions believe both companies currently have attractive valuations, especially considering expected recovery and growth potential.

Risks

• Further impact of volume-based procurement policies on factory gate prices for some products
• Penetration progress into top-tier Chinese hospitals below expectations
• Difficulties entering North American and European markets
• Risks related to patent litigation
• Risks regarding chip supply chains and raw materials (e.g., helium)
• Chinese macroeconomic downturn
• Unexpected changes in trade policies

What to watch

• Subsequent monthly hospital procurement data
• Updates to medical equipment trade-in policies
• New product launches (e.g., United Imaging ultrasound product line)
• Completion status of Mindray's domestic destocking process