CITIC Securities: Turning point in the medical devices sector has arrived

CITIC Construction Investment pointed out that the turning point for the medical device sector is approaching, and there are opportunities for performance and valuation recovery in individual stocks by 2026. Focus on companies that are expected to accelerate growth in 2026 compared to 2025, which may achieve a double boost in performance and valuation in the future. For 2026, the A-shares in the medical device sector should focus on investment opportunities related to performance recovery and overseas expansion, while in the Hong Kong market, attention should be paid to the sector effects brought about by the listing of several high-quality medical device companies, as well as the gradual release of profits and undervalued layout opportunities by several leading companies in medical device sub-sectors.

The full text is as follows

Medical Device Industry Weekly Report

This week, geopolitical conflicts continued to unfold, putting pressure on the overall market, and the medical device sector performed generally. This week, the brain-computer interface sector saw a pullback after last week’s rise; it is recommended to increase allocation to the medical device sector in 2026. In the short term, it is advisable to seize the performance and valuation recovery opportunities of individual stocks with improved performance in 2026, as several leading companies in the medical device industry’s sub-sectors are expected to experience accelerated growth in 2026. Additionally, attention should be paid to new technology directions such as surgical robots and brain-computer interfaces. In the long term, investment opportunities in the medical device industry come from innovation, overseas expansion, and mergers and acquisitions. The sector’s innovation and internationalization capabilities are being recognized, and valuations are being restructured.

The turning point for the medical device sector is approaching, and there are opportunities for performance and valuation recovery in individual stocks by 2026. Focus on companies that are expected to accelerate growth in 2026 compared to 2025, which may achieve a double boost in performance and valuation in the future. For 2026, the A-shares in the medical device sector should focus on investment opportunities related to performance recovery and overseas expansion, while in the Hong Kong market, attention should be paid to the sector effects brought about by the listing of several high-quality medical device companies, as well as the gradual release of profits and undervalued layout opportunities by several leading companies in medical device sub-sectors.

The long-term investment opportunities in the medical device sector arise from innovation, overseas expansion, and mergers and acquisitions. The sector’s innovation and internationalization capabilities are being recognized, and valuations are being reassessed. After a significant rise in the innovative drug sector, the medical device sector’s globally competitive improved and breakthrough innovative products are gradually being recognized. A number of companies are also actively expanding their strategic second growth curve and achieving high growth in overseas business, leading to rising valuations.

It is recommended to continue focusing on innovative device tracks with large market space and low localization rates, as well as investment opportunities in themes such as mergers and acquisitions, brain-computer interfaces, AI healthcare, surgical robots, and exoskeleton robots. Attention should be paid to the relevant catalysts for innovative medical devices in areas such as clinical trials, registration, volume expansion, and overseas expansion for products like PFA, RDN, TAVR, etc. Directions with multiple potential catalysts are expected to see stocks with several-fold increases, and in the future, AI healthcare and brain-computer interfaces may also become new technology directions that attract significant investor attention.

Risk warning: industry policy risks; research and development risks not meeting expectations; approval risks not meeting expectations; macroeconomic environment volatility risks.

(Source: Yicai)