Jun Update: Expecting China Recovery in 2H26: China (PRC) | Medical Supplies & Devices

Research evidence excerpt

Jun Update: Expecting China Recovery in 2H26: China (PRC) | Medical Supplies & Devices

China (PRC) | Medical Supplies & Devices EquityJulyResearch16, 2026

Jun Update: Expecting China Recovery in

2H26

We are publishing China hospital procurement data across imaging, PMLS,

endoscopy, and RT: 1) June procurement rose 16%, the first monthly growth

in 2026, though 1H26 declined 11%; 2) UIH outperformed with 24% YTD

growth vs. a 15% decline in imaging; 3) Mindray's June procurement rose

42%, driven by ultrasound (+57%) and PMLS (+26%). We expect domestic

leaders to gain share, while MNCs remain cautious on 2H26 China demand.

China hospital procurement data on medical equipment - In June, China’s procurement sales

data for medical equipment showed yoy increase of 16%, the first monthly growth in 2026,

while YTD procurement declined 11% yoy. We think YTD soft procurement is mainly due to

a high base in 1H25 and VBP. Besides, FY25 procurement growth of 25% may drive revenue

growth recovery for medical equipment players in 2026. We have already seen growth recovery

by Imaging players (e.g., UIH) since 3Q25 and PMLS maker Mindray since 1Q26.

Mindray - Mindray's June procurement rose 42% yoy on strong ultrasound (+57%) and PMLS

(+26%). The China PMLS segment showed promising 31% YTD growth, while ultrasound is soft

at -11%. We think all the weakness has been fully priced in. Most importantly, channel inventory

has normalized to a healthy <2.5-month level, w/ China IVD biz largely stabilized. Investor FAQs

center on whether 2026 is a real inflection after 2025's false start, and what is fair value for

teens growth LT. We see a 2Q26 inflection as inventories normalize and VBP/DRG impacts

ease. Overseas growth stays strong (EU/EM). 30x fwd P/E looks fair to us. H-share dual-listing