UBS: China MedTech — 2025 Review and 2026 Outlook
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UBS reports that China's medical technology market delivered a lackluster performance in 2025, constrained by soft customer demand and policy-driven pricing pressures. According to IQVIA, the market grew only 0.4% year-over-year in the first three quarters. Among A-share listed companies, consumables revenue rose 7.6%, equipment edged up 0.8%, and in-vitro diagnostics dropped 14.5% during the same period.
Hospital equipment procurement showed initial recovery, with tender amounts increasing 13% year-over-year in the first eleven months of 2025. However, growth slowed significantly in the second half as the post-anti-corruption backlog eased. Local government healthcare special bond issuance fell 36% to 119 billion yuan, potentially constraining future domestic equipment growth, even as central government stimulus totaling 15-20 billion yuan may materialize in actual procurement during 2026.
Centralized procurement continues to expand, expected to cover 61% of the high-value consumables market and 41% of low-value consumables in 2026. The IVD sector faces ongoing reagent pricing pressures despite stabilizing test volumes. UBS prefers categories with significant surgical volume growth potential or those already highly covered by procurement. Overseas expansion remains a critical growth avenue. Major companies like Mindray Medical, Yuwell Medical, Snibe, and Winmedex target double-digit to 30%+ international revenue growth, outpacing domestic performance and effectively mitigating local market headwinds.