According to a research report from Zhongtai Securities, revenue for listed medical device companies in 2025 reached CNY 256.577 billion, a year-on-year decrease of 1.42%, while non-GAAP net profit was CNY 23.693 billion, a year-on-year decrease of 15.16%. Performance varied significantly across sub-sectors. In terms of 2025 revenue growth, the ranking from high to low was high-value consumables (+6.09%), medical equipment (+1.98%), low-value consumables (+0.77%), and in-vitro diagnostics (-11.96%). For non-GAAP profit growth, the ranking from high to low was high-value consumables (+13.64%), medical equipment (-14.69%), in-vitro diagnostics (-27.72%), and low-value consumables (-56.12%). The high-value consumables segment has entered the post-centralized procurement (post-GPO) phase, with negative impacts gradually clearing and growth resuming through innovation or overseas expansion. Areas such as orthopedics and electrophysiology showed solid growth. For medical equipment, most companies experienced an inflection point in the third quarter due to a recovery in tendering and bidding activity combined with a low base, with overall operations stabilizing and improving. Low-value consumables also gradually resumed growth as the impact of international situations eased. In-vitro diagnostics faced pressure in 2025 due to the intensive implementation of policies like DRGs, GPO, and mutual recognition of test results, but performance is expected to stabilize and recover in 2026. Zhongtai Securities' key views are as follows: Performance in 2026Q1 was relatively better for low-value and high-value consumables, while in-vitro diagnostics gradually stabilized. In the first quarter of 2026, the overall revenue of the medical device sector increased by 3.76% year-on-year, while non-GAAP net profit decreased by 4.72% year-on-year. The ranking of year-on-year revenue growth from high to low was low-value consumables (+10.60%), medical equipment (+5.11%), high-value consumables (+4.11%), and in-vitro diagnostics (-4.13%), continuing the recovery trend from 2025. The ranking of year-on-year non-GAAP net profit growth from high to low was in-vitro diagnostics (+1.51%), high-value consumables (-2.57%), low-value consumables (-3.81%), and medical equipment (-8.85%). The medical equipment segment saw a significant decline in profitability due to intensified price competition in tendering and bidding. High-value and low-value consumables, with many companies involved in overseas business, were significantly impacted by foreign exchange losses in 2026Q1 but still demonstrated strong resilience. Looking ahead to the full year 2026, high-value consumables, having already passed an inflection point, are expected to show continued improvement in operational performance. However, significant exchange rate volatility may affect quarterly profit margins. For medical equipment, driven by equipment renewal since Q4 2024, the overall base for tendering and bidding in 2025 was high, creating some pressure for year-on-year growth in 2026. However, considering the mismatch between inventory levels and bidding performance, corporate earnings are expected to resume growth trends from a low base. The in-vitro diagnostics segment is gradually digesting the negative impacts of multiple policies. Test volumes had already begun to stabilize in Q4 2025. With the ongoing implementation of GPO and price guidelines, prices are expected to remain under slight pressure in 2026, but overall performance is anticipated to bottom out and recover. High-Value Consumables: Post-GPO price declines are moderate, with growth driven by domestic stability and overseas expansion. In 2025, sub-sector revenue grew by 6.09% (+2.50 percentage points), and non-GAAP profit increased by 13.64% year-on-year (+17.73 percentage points). In 2026Q1, revenue for the high-value consumables segment rose by 4.11% (+2.95 percentage points), while non-GAAP net profit declined by 2.57% (+2.53 percentage points). This segment performed relatively more stably within the medical device sector and was the first to emerge from the negative policy impacts. Profit volatility was mainly influenced by exchange rate fluctuations affecting overseas business. Considering the trend of "procure all that should be procured" domestically, most commonly used high-value consumables have been successively included in national or regional GPO, with price reduction pressure continuously being released. The market share of domestic products winning bids has increased significantly. Many sub-segments have entered the post-GPO stage, achieving medium-to-long-term sustained growth through continuous innovation and overseas expansion. Medical Equipment: Equipment bidding growth slows under a high base, with high-growth segments & high-end products driving differentiated performance. In 2025, sub-sector revenue increased by 1.98% (+3.36 percentage points), while non-GAAP profit decreased by 14.69% year-on-year (+3.24 percentage points). In 2026Q1, revenue for the equipment segment rose by 5.35% (+9.34 percentage points), and non-GAAP net profit declined by 7.83% (+5.24 percentage points). Influenced by factors like the implementation of equipment renewal, terminal bidding data has significantly improved since Q4 2024, with the medical equipment sector's performance reaching an inflection point in Q3 2025. According to the Zhongcheng Medical Device Database, examining bidding activity in several sub-segments closely related to listed companies—including ultrasound, digestive endoscopy, MRI, and PET—overall bidding growth in 2025 was significant. However, by the end of 2025, under the high base of the same period in 2024, bidding growth in some sub-segments faced certain pressures. Low-Value Consumables: Foreign exchange impacts short-term reported performance; optimism for growth space opened by overseas expansion. In 2025, revenue for the low-value consumables sub-sector increased by 0.77% (-12.13 percentage points), while non-GAAP net profit decreased by 56.12% (-170.95 percentage points). In 2026Q1, segment revenue increased by 10.60% (+8.86 percentage points), and non-GAAP net profit decreased by 3.81% (-11.00 percentage points). Short-term performance in 2025 fluctuated, mainly due to the impact of ongoing changes in the international situation since Q2 on orders and profitability. As many companies in the low-value consumables segment have significant overseas operations, shipping and order rhythms were affected. Revenue recovered to steady growth in 2026Q1, while profitability was impacted by foreign exchange losses, leading to a decline in reported profit. In-Vitro Diagnostics: Test volumes stabilize, negative price impacts gradually clear; long-term optimism for growth driven by innovation and overseas expansion. In 2025, sub-sector revenue decreased by 11.96% (-5.84 percentage points), and non-GAAP profit decreased by 27.72% year-on-year (+19.59 percentage points). The revenue decline was mainly due to simultaneous decreases in volume and price caused by the intensive implementation of negative policies such as DRGs, anti-corruption measures, mutual recognition of test results, unbundling of test packages, and GPO. The profit decline was larger than the revenue decline, primarily due to reduced economies of scale, while GPO and value-added tax rate changes also impacted prices. In 2026Q1, segment revenue decreased by 4.13% (+11.25 percentage points), while non-GAAP net profit increased by 1.51% (+41.78 percentage points). The negative impact on test volumes had essentially bottomed out and cleared by the end of 2025. On the price front, considering the pace of GPO implementation and adjustments to terminal charges, short-term prices may remain under pressure, with stabilization expected in the second half of 2026. Therefore, in 2026Q1, with test volumes largely stabilized, prices were still affected by the ongoing implementation of GPO, leading to adjustments on the revenue side. Profitability returned to growth due to efficiency improvements and a low base. Risk warnings: Risks related to product market promotion falling short of expectations; risks of policy changes; industry data has undergone certain screening and classification, posing a risk of deviation from actual industry conditions; risks of delayed updates in research report information.