According to the Zhitong Finance APP, Zhongtai Securities released a research report stating that the domestic medical device industry is still in a rapid development stage. In the short term, medical insurance cost control may bring negative impacts in the medical device sector, but the firm remains optimistic about import substitution driven by innovation and globalization. At the current point in time, the firm expects that multiple negative impacts are being fully released, and the medical device sector is likely to welcome a phase turning point in Q3 2025. The firm continues to be optimistic about: (1) domestic companies enhancing their competitiveness under policy support and innovation, accelerating import substitution; (2) targets with a well-established globalization layout and continuous breakthroughs in overseas markets; (3) focusing on investment opportunities in AI healthcare, brain-computer interfaces, and other themes.
<h2>Zhongtai Securities' main viewpoints are as follows:</h2>
Multiple policy disturbances continue to pressure in-hospital diagnosis and treatment, while internationalization is expected to bring new growth points
In the first half of 2025, the revenue of listed medical device companies reached 121.296 billion yuan, a year-on-year decrease of 6.32%, with a non-net profit of 15.831 billion yuan, a year-on-year decrease of 23.07%. Different sub-sectors show significant differentiation: the revenue growth rate in the first half of 2025 is ranked from high to low as high-value consumables (+3.99%), low-value consumables (+0.31%), medical equipment (-5.84%), and in vitro diagnostics (-15.72%). The non-net profit growth rate is ranked from high to low as high-value consumables (+1.97%), low-value consumables (-21.56%), medical equipment (-24.94%), and in vitro diagnostics (-40.68%). Among them, the high-value consumables sector has entered the post-collection stage, with a significant improvement trend as negative factors gradually clear, especially for categories cleared in the collection such as orthopedics and electrophysiology, which have shown good growth performance; low-value consumables are affected by changes in the international situation, with fluctuations in short-term shipments and orders, and the firm expects pressure to gradually ease in the second half of 2025; most companies in the medical equipment sector are under pressure due to changes in the rhythm of bidding and inventory destocking, and a performance turning point is expected to gradually emerge in the third quarter; in vitro diagnostics continue to be under pressure in the short term due to the intensive implementation of policies such as DRGs, collection, and mutual recognition of inspections, and the firm expects to see a bottoming out by the end of 2025.
The high-value consumables sector performed relatively well in Q2 2025, with significant month-on-month improvement
In Q2 2025, the overall revenue of the medical device sector decreased by 6.50% year-on-year, and the non-net profit decreased by 28.75% year-on-year, with pressure mainly coming from the in vitro diagnostics and medical equipment sectors. In Q2 2025, the in vitro diagnostics sector was negatively impacted by medical insurance cost control policies, showing a trend of decline in both volume and price, while the equipment sector continued to be affected by high bases and inventory destocking; profit fluctuations were greater than revenue, mainly due to price competition and declining scale effects. In terms of sub-sectors, the year-on-year revenue growth rate is ranked from high to low as high-value consumables (+7.61%), low-value consumables (-1.63%), medical equipment (-6.35%), and in vitro diagnostics (-16.04%). With the gradual clearing of collections and the deepening of overseas strategies, the high-value consumables sector stabilized first in Q1 2025 and further accelerated in Q2, showing a significant improvement trend.
High-value consumables: multiple subdivisions have entered the post-collection stage, on one hand, optimistic about the valuation repair brought by collection optimization, on the other hand, innovation + going overseas remains the core competitiveness
In the first half of 2025, the revenue growth of the sub-sector was 3.99% (-0.52pp), and the non-recurring profit increased by 1.97% (-7.00pp) year-on-year. In the second quarter of 2025, the revenue growth of the high-value consumables sector was 7.61% (-0.95pp), and the non-recurring net profit grew by 10.46% (-5.31pp). This sector performed relatively steadily under the medical device sector and was the first sub-sector to emerge from the negative impact of policies. Considering the domestic trend of &#34;collecting as much as possible,&#34; most commonly used high-value consumables have gradually been included in national or local centralized procurement, with continuous price reduction pressure. The domestic bidding share of related products has significantly increased, and various sub-segments are gradually entering the post-centralized procurement stage. Through continuous innovation and overseas expansion, long-term sustainable growth can be achieved. The institution recommends focusing on micro-electrophysiology (+12.80%, compared to the year-on-year change in revenue for 2024H1), Huatai Medical (+21.26%), Sanyou Medical (+17.77%), and also paying attention to Nanwei Medical (+17.36%) and Chunli Medical (+28.27%), which are experiencing rapid growth in overseas business. Recently, the rules for the eleventh batch of drug centralized procurement are no longer simply based on the lowest bid as a reference. With the optimization of drug centralized procurement rules, the procurement rules for consumables are also expected to be optimized, which may lead to valuation recovery for related companies that are currently undergoing or have not yet undergone centralized procurement.
Medical Equipment: Accelerated Equipment Updates, Mid-term Structural Differentiation in Hospital Demand
In the first half of 2025, the revenue of the sub-sector decreased by 5.84% (-4.68pp), and the non-recurring profit decreased by 24.94% (-17.97pp) year-on-year. In the second quarter of 2025, the revenue of the equipment sector decreased by 6.35% (-5.59pp), and the non-recurring net profit decreased by 33.33% (-27pp). In 2024, the medical equipment sector was affected by anti-corruption measures and the pace of equipment updates, leading to delays in terminal bidding, negatively impacting both revenue and profit for companies. According to the Zhongcheng Medical Device Database, the institution selected several sub-sectors with a high correlation to listed companies to observe bidding situations, including ultrasound, digestive endoscopy, magnetic resonance, and PET. Since June 2024, some categories have shown a significant upward trend month-on-month. In the first half of 2025, with the continuous recovery of bidding and the low base effect, the overall bidding for medical equipment has shown a significant growth trend. However, considering that companies still need time to digest channel inventory, the institution expects the sector's performance to reach an inflection point in the third quarter of 2025. In the medium term, considering the differences in the pace of demand release since the pandemic, the institution expects the future prosperity of different sub-sectors within the sector to show differentiation.
Low-value Consumables: Optimistic About Overseas Expansion Opening Growth Space, Focus on Assessing Geopolitical Risks
In the first half of 2025, the revenue growth of the low-value consumables sub-sector was 0.31% (-9.45pp), and the non-recurring net profit decreased by 21.56% (-46.03pp). Most companies in the revenue sector achieved restorative growth after completing destocking downstream, and profit performance improved significantly due to scale effects. In the second quarter of 2025, the sector's revenue decreased by 1.63% (-17.60pp), and the non-recurring net profit decreased by 42.37% (-57.91pp). Considering that many companies in the low-value consumables sector are expanding overseas, it is essential to assess geopolitical risks. Therefore, the institution is more optimistic about low-value companies with customer accumulation and overseas production capacity, especially those domestic OEM/ODM companies continuously entering the foreign leading supply chain system
Expected to bring sustained high growth in the medium term.
In Vitro Diagnostics: Policies such as DRGs, centralized procurement, and mutual recognition of test results lead to a decline in both volume and price; long-term growth is optimistic due to innovation and overseas expansion.
In the first half of 2025, the sub-sector's revenue decreased by 15.72% (-9.52pp), and the non-recurring profit fell by 40.68% (+30.87pp) year-on-year. The revenue decline is mainly due to the intensive implementation of negative policies such as DRGs, anti-corruption measures, mutual recognition of test results, unbundling of packages, and centralized procurement, leading to a simultaneous drop in both volume and price. The profit decline is greater than the revenue decline primarily due to the decrease in economies of scale, while centralized procurement and VAT rate adjustments also impact prices. Looking ahead to the second half of 2025, considering the execution rhythm of DRGs and mutual recognition of test results, the bank expects the negative impact on testing volume to bottom out by the end of 2025. In terms of prices, considering the pace of centralized procurement and the adjustment progress of terminal charges, short-term prices may remain under pressure but are expected to stabilize in the first half of 2026. In the medium to long term, the bank remains optimistic about the growth potential of the IVD industry driven by continuous innovation and overseas expansion.
Risk Warning: Risks of product market promotion not meeting expectations; risks of policy changes; risks of deviation from actual industry conditions due to certain filtering and categorization of industry data; risks of untimely updates of research report information, etc

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Zhongtai Securities released a research report stating that although short-term medical insurance cost control has a negative impact on the medical device industry, it remains optimistic about import substitution and global development driven by innovation. It is expected that the third quarter of 2025 will see a phased turning point for the medical device sector, especially with significant improvements in the high-value consumables segment after centralized procurement. The firm is optimistic about the competitiveness of domestic companies, breakthroughs in overseas markets, and investment opportunities in themes such as AI in healthcare

Zhitong

Chunli Medical

CHUNLI MEDICAL

Sanyou Medical

Zhongtai Securities: High-value consumables are expected to be the first to emerge from policy disturbances, continuing to be optimistic about medical device innovation + going overseas