China Merchants Securities International indicates that in the first half of 2025, the mainland medical device industry recorded an overall revenue decline of 3.8% year-on-year, with net profit attributable to shareholders falling 12.8% year-on-year and non-recurring net profit dropping 14.5% year-on-year. For the second quarter alone, revenue declined 5.5% year-on-year, net profit attributable to shareholders fell 20.3% year-on-year, and non-recurring net profit decreased 25% year-on-year.

The analysis was based on a sample of 129 medical device companies listed on the Hong Kong Stock Exchange and A-shares. The research found that approximately 53% of companies achieved year-on-year revenue growth in the first half, with 16% recording growth rates exceeding 20% and 37% showing growth rates between 0-20%.

The firm believes that after experiencing disruptions from both the pandemic and domestic volume-based procurement policies, the overall medical device industry's revenue and profit levels are expected to bottom out and rebound. The analysis projects that from the second half of 2025 to 2026, the mainland medical device industry will enter a new development phase. Driven by the dual engines of marginal improvement in domestic policy environment and external market expansion, the sector's overall recovery trend is clearly established.

The firm recommends focusing on two main investment themes: domestic substitution and overseas expansion. In the short term, attention should be given to undervalued targets with clear performance improvement prospects, while long-term allocation should focus on innovation-driven high-growth sectors.

The firm suggests paying attention to Mindray Medical (300760.SZ), United Imaging Healthcare (688271.SH), MEDBOT-B (02252), Huitai Medical (688617.SH), and MGI Tech (688114.SH).