According to a research report from Everbright Securities, the medical device industry has faced sustained pressure in recent years due to factors such as consumables centralized procurement, medical insurance cost control, and channel destocking. As policy impacts gradually dissipate, equipment bidding data continues to improve, and channel inventories approach their end, the industry is poised for a dual recovery in performance and valuation. Overall, the firm believes that innovation-driven global expansion and M&A integration are expected to become key growth engines for the industry in 2026. Everbright Securities' main views are as follows:

Multidisciplinary Integration Empowers, Unearthing the Second Growth Curve Medical devices represent a typical multidisciplinary cross-industry. The journey from breakthrough laboratory research to clinical application at the bedside often involves overcoming bottlenecks in technology translation and complex challenges in multidisciplinary collaboration. The industry integrates multiple disciplines including precision machinery, optics, electronic information, software algorithms, and clinical medicine. This multidisciplinary nature grants the medical device sector strong underlying technological versatility and vast potential for cross-domain expansion, which is becoming the core driver for the industry's valuation reshaping. The recent sustained strength of stocks like Haitai Newlight and Yirui Technology is fundamentally driven by market recognition of their technology spillover value. The firm believes that medical device companies, leveraging core technological capabilities such as optical imaging, X-ray detection, precision injection molding/molding, and cryogenic refrigeration accumulated over the long term in medical scenarios, are gradually extending into non-medical high-growth fields like AI computing optics, PCB semiconductor testing, and humanoid robots. This is expected to successfully open up a second growth curve.

Technology crossover essentially represents the reuse and amplification of medical device companies' manufacturing capabilities. These companies, with their stringent quality control standards from the medical field and technological barriers built through long-term high R&D investment, possess inherent quality and technological advantages over traditional enterprises when entering non-medical sectors such as industrial, consumer electronics, and robotics. Such business transformations are expected to contribute significantly to corporate performance and profit elasticity, driving the reconstruction and elevation of corporate valuation systems.

Clear Long-Term Growth Logic; Innovation-Driven Global Expansion and M&A Integration Expected to Become Industry Growth Engines In recent years, the innovation capability of domestic medical devices has continuously improved, with the number of approved innovative medical devices remaining high. High-end imaging equipment, cardiovascular interventional devices, surgical robots, brain-computer interfaces, and other fields are gradually achieving a transition from "catching up" to "running alongside" or even "leading." Technological breakthroughs and accelerated commercialization in emerging sectors continue to catalyze sector enthusiasm, with individual products in specific segments showing potential to capture global market space. Against the backdrop of intensifying domestic competition and price pressures, overseas markets, with their higher price stability and superior profit margins, have become a core growth increment for leading companies. China's medical device export value showed steady growth in 2025. The overseas revenue growth rates of leaders like Mindray Medical and United Imaging Healthcare continue to rise, with their internationalization capabilities gaining global market recognition. Furthermore, M&A integration serves as an important means for increasing industry concentration, rapidly addressing corporate weaknesses, and expanding into new sectors within the medical device industry.

Investment Recommendations: 1) In the short term, focus on stocks with clear performance improvement expected in 2026 and a low base in 2025. Prioritize leading companies in segments where centralized procurement impacts have cleared, channel destocking is complete, and order recovery is evident, to capture the Davis double-click opportunity from performance and valuation recovery. 2) Secondly, focus on companies with outstanding innovation capabilities and global competitiveness, paying close attention to frontier sectors like surgical robots, brain-computer interfaces, and high-end imaging equipment, to identify innovative niche products with potential for global expansion. 3) Thirdly, focus on companies successfully expanding through technology crossover, poised to open a second growth curve. Examples include firms leveraging underlying technologies in optics, precision manufacturing, or cryogenic refrigeration to enter AI, semiconductor, or robotics fields, which may achieve valuation reshaping. Companies suggested for attention include Yirui Technology, Haitai Newlight, United Imaging Healthcare, Meihao Medical, Kangzhong Medical, MicroPort Medical (H), and MicroPort Robot-B (H).

Risk Analysis: Centralized procurement policies exceeding expectations, failure in innovative product R&D, and slower-than-expected overseas market expansion.