CITIC Construction Investment: Medical Devices and Services Q3 Companies Exceed Expectations and Are Optimistic About the 2027 Performance Improvement Trend

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the medical device sector's Q3 revenue continued to grow, and quarterly profits achieved positive growth for two consecutive quarters. The performance of many leading companies exceeded expectations, and performance growth is expected to accelerate in '27. The medical device sector has achieved positive revenue growth for five consecutive quarters, and net profit to mother has been growing for two consecutive quarters, and an inflection point in the sector's performance has basically been established. The 26Q3 medical device sector's revenue, net profit attributable to mother, and net profit after deducting non-return to mother grew by +9.64%, +22.72%, and +43.29%, respectively. From the revenue side, since 25Q3, the medical device sector's revenue has achieved positive growth for five consecutive quarters and is showing a gradual acceleration trend; from the profit side, the Q3 profit side not only continues the rapid growth trend of Q2, but Q4 is expected to continue to achieve rapid growth in the context of a low base.

CITIC Construction Investment's main views are as follows:

Look at the segmented areas

High-value consumables: 26Q3 continued the recovery trend of Q2, but the different segments were differentiated; the cardiovascular track performed well; orthopedics, ophthalmology, and neurosurgery were affected by the pace of collection renewal, and short-term performance was under pressure; digestive intervention in domestic procurement had a great impact on related companies' domestic business, but the overseas business maintained a high growth trend, partially offsetting the impact of collection.

Medical equipment: The 26Q3 revenue growth rate increased further compared to the first half of the year. The core stemmed from a marginal recovery in domestic terminal procurement demand, compounded by the increase in domestic market share of some companies and the rapid expansion of overseas business. The Q3 profit side reversed the downward trend in the first half of the year, with a sharp year-on-year increase. On the one hand, the profit base for the same period last year was low, and on the other hand, thanks to the accelerated upward trend in revenue growth in the Q3 sector compared to the first half of the year.

IVD: The 26Q3 revenue growth rate was further accelerated month-on-month compared to 26Q2. On the one hand, the 25Q3 IVD sector was still affected by multiple policies, and the impact of the 26Q3 policy weakened marginally. On the other hand, overseas business became an important growth point. In addition, some revenue from horizontal mergers and acquisitions of individual companies increased. The profit side recovery is even more obvious. Against the backdrop of a low base, the profit side growth rate of the sector has maintained growth of more than 50% for two consecutive quarters.

Household medical devices: The domestic performance of 26Q3 household medical devices companies is in a steady state of recovery, mainly due to the overall stability of domestic consumer demand and an improvement in demand in some categories; the overseas market is still the key layout direction for domestic household device companies, and the overseas business of various household device companies continues to grow rapidly.

Low-value consumables: Revenue in the 26Q3 low-value consumables sector grew steadily. On the profit side, the profit growth rate of the sector declined month-on-month due to exchange gains and losses and the negative effects of changes in the fair value of individual companies' wealth management products

medical devices

The performance of many companies in Q3 exceeded expectations, and performance is expected to improve in '27. The sector effect will gradually be reflected. Affected by factors such as the collection of consumables and increased medical compliance requirements, the A-share Shenwan Medical Device Index continued to decline in 2021-2024, rising and then falling in 2025, then rebounding in early 2026 and then falling. As the impact of policies is gradually clarified, and performance gradually recovers after corporate strategy adjustments, the equipment sector is undergoing both valuation and performance restoration. Q3 The Q3 revenue or profit of many companies, such as Lianying Healthcare, Huitai Healthcare, New Industries, and Microelectrophysiology, exceeded expectations. The performance of many companies such as Mindray Healthcare, New Industries, and Yuyue Healthcare is expected to accelerate in '27. The effects of the medical device sector will gradually become apparent. Both Tier 1 and 2 companies have opportunities. It is expected that the medical device holdings of public funds will gradually increase, and it is recommended that the medical device sector be added.

Healthcare services: Revenue in the 26Q3 sector maintained positive growth, and profitability recovered

The year-on-year growth rates of revenue, net profit attributable to mother, and net profit excluding non-return to mother in the 2026Q1-3 sector were 2.85%, -4.64%, and -4.06%, respectively. The 2026Q3 segment's revenue, net profit to mother, and net profit after deducting non-return to mother grew by 5.02%, 11.47%, and 12.50%, respectively. Revenue in the 26Q3 sector maintained positive growth, mainly benefiting from the improvement in the revenue of general hospital companies and the recovery in the revenue growth rate of consumer healthcare companies; the Q3 sector's profit growth rate was faster, mainly due to the lower 25Q3 base. The decline in the sector's profit growth rate in the first three quarters of 2026 was mainly due to the large one-time impact of Aier's supplementary tax payments and late fees in the second quarter.

The concentration of leading ophthalmology companies continues to increase

Since 2024, the revenue growth rate of the ophthalmology medical service industry has declined, and gross margin has declined year-on-year due to increased competition, cataract intraocular crystal collection, and medical insurance payment reforms. However, national ophthalmology chains Aier, Huaxia, and Puri have maintained revenue growth in the context of industry pressure, and industry concentration continues to increase. Even if the impact of mergers and acquisitions of the three companies is excluded, endogenous revenue is expected to grow positively in 2024-26Q3, highlighting the importance of brand and operating capacity for hospitals.

Risk warning: industry policy risk; risk of R&D falling short of expectations; risk of falling short of expectations in approval; risk of macro-environmental fluctuations