CITIC Construction Investment: Q3 Medical Equipment Industry Domestic Bidding Continual Improvement Proposals Continued Attention to Policy Progress
The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the pharmaceutical industry chain: 1) prescription drugs: innovative entry drives performance growth, becoming the second growth curve in terms of internationalization, from BD to organizing overseas and strategic alliances; 2) intensive catalysis in 2026 is expected to further verify the logic of industrial development. Conferences such as ESMO will usher in many pounds of data verification this year; 3) Domestic market demand is gradually recovering and actively expanding overseas layout. In the medium to long term, domestic production replacement of the industrial chain is imperative.
Medical devices and services: Domestic tenders in the Q3 medical equipment industry continued to improve. It is recommended to continue to pay attention to policy progress. The high growth in overseas business of some companies has become an important driving force for steady growth in performance. Some medical equipment travel companies have benefited from new business expansion, and their performance has increased or improved. It is recommended to focus on the important catalysts for the release of related new products or the execution of business orders. The collection of some high-value consumables and price adjustments in the IVD industry are about to be implemented. The impact on various companies is somewhat divided. If the impact of the policy is not significant, the sector is expected to experience a double recovery in performance valuation.
CITIC Construction Investment's main views are as follows:
Performance review: In 2026, both H1 revenue and net profit after deduction of non-return to mother ushered in growth. In the first half of 2026, the operating income of all sectors of the pharmaceutical industry increased 1.81% year on year, and net profit after deducting non-return to mother increased 6.05% year on year. Overall, the pharmaceutical industry's revenue and net profit deducted both ushered in an improving trend in the first half of 2026. In terms of the sub-sector, 26H1 biopharmaceutical upstream, low-value consumables, household equipment, CRO/CMO, other devices, scientific research reagents, pharmaceutical retail and pharmaceutical distribution achieved a double increase in revenue and net profit withheld from the mother. Among them, upstream biopharmaceuticals and low-value consumables grew strongly. Looking at the changes in the 26H1 non-growth rate ranking, there has been an increase in the ranking of low-value consumables, household equipment, other devices, scientific research reagents, vaccines, pharmaceutical distribution, and in vitro diagnosis. The fastest increase is for scientific research reagents, low-value consumables, and vaccines.
Global perspective: The value of innovation is highlighted, and China's power is penetrating at an accelerated pace. China Pharmaceuticals has the advantage of “innovation and upgrading + supply chain resilience”. The down payment for overseas licensing of innovative drugs in 2025 greatly exceeds that of last year, and devices are also actively exploring ways to go overseas. The US dominates early R&D and high-end pricing, but multinational pharmaceutical companies' patent demand is strong under the cliff, the global cost performance ratio of Chinese assets is prominent, and there is broad scope for internal and external collaboration.
Domestic value reshaping: focus on high-quality development and establish a solid foundation for innovation and compliance. ① Policy: Focus on high-quality development, collection optimization, diversified payment, and medical service price reform; ② Pharmaceutical chain: innovative drugs enter the commercialization period and focus on supply chain security; ③ Equipment: domestic substitution extends to the middle and high-end, optimistic about the implementation of new technologies such as overseas, new technology (AI, brain-computer interface), and merger and acquisition integration; ④ Track opportunities for traditional Chinese medicine, pharmacies, medical services and other industries to bottom up and transform and upgrade.
Reshaping the value of going overseas: making multi-dimensional breakthroughs and constructing a new pattern of globalization. ① Innovative drugs: normalization of BD, entering the era of internationalization 2.0; ② industrial chain: recovery in domestic and overseas demand; ③ APIs: resolving short-term disruptions and transformation to specialty APIs and CDMOs; ④ Devices: opening up overseas markets, independent sales of innovative devices in parallel with BD; ⑤ Blood products/vaccines: overseas registration of hydrochloric acid, diversified vaccine delivery models.
Risk Alerts
Industry policy risk: Risk of changes in research design requirements, price changes, volume procurement policy changes, and changes in the scope and ratio of medical insurance reimbursement due to industry policy adjustments. In particular, changes in procurement and medical insurance payment policies have had a great impact on industry development expectations.
Risk of development falling short of expectations: In the process of developing new drugs and devices, there is a risk of uncertain clinical enrollment progress and uncertain efficacy results and safety outcome data.
Risk of approval falling short of expectations: There is a risk that the approval cycle will be extended due to additional data or changes in the approval process during the approval process.
Risk of macroeconomic fluctuations: A further slowdown in global economic growth may affect downstream demand. In addition, risks related to international relations, climate change, inflation, and exchange and interest rates need to be considered.
Risk of performance falling short of expectations: Due to the above factors and changes in the company's business strategy, profit forecasts may fall short of expectations.