Summary of China Healthcare Conference Call Industry Overview - The conference call focused on the **China hospital equipment industry**, highlighting the bidding data for medical devices in August 2025, which showed better-than-expected growth. Key Points 1. **Bidding Growth**: - August 2025 saw a month-over-month (MoM) growth of **+12%** and a year-over-year (YoY) growth of **+32%**, marking the tenth consecutive month of positive growth [2][8][32]. - This growth is attributed to the implementation of this year's trade-in funding, which has begun to stimulate bidding values [2][22]. 2. **Trade-in Program**: - The trade-in program's impact was confirmed as the rolled-over funding from the previous year was largely utilized by July, indicating that new funding has started to take effect [2][22]. 3. **Device Performance**: - Among nine tracked medical devices, seven showed positive YoY growth in August, with notable increases in PET-CT (+173%), CT scanners (+81%), and DR (+54%) [32][51][53]. - The ultrasound segment also saw a significant increase of **+35%** YoY in August, up from **+23%** in July [18][23]. 4. **Market Dynamics**: - Domestic companies have shown resilience, with all domestic players recording positive growth, while multinational corporations (MNCs) had previously shown negative growth, which has now largely disappeared [12][20]. - Ongoing regional Value-Based Procurement (VBP) remains a concern, particularly affecting pricing in the ultrasound and CT scanner segments [16][22]. 5. **Company-Specific Insights**: - **United Imaging**: - Reported a **+22%** YoY revenue growth in Q2 2025, with expectations of **+45%** and **+15%** growth for Q3 and Q4 2025, respectively [22][84]. - The company is optimistic about the trade-in program's scale and pace in 2025, expecting smoother operations compared to 2024 [22][84]. - **Mindray**: - Experienced a decline in patient monitor sales (-25% YoY in August) but saw strong growth in ultrasound (+35% YoY) [23][83]. - The company is managing inventory risks and expects to return to positive growth levels in Q3 2025 [23][24]. 6. **Investment Outlook**: - Both United Imaging and Mindray are rated as "Buy" by analysts, with significant long-term growth potential anticipated due to increasing government support and market share growth [84][83]. - Key catalysts for growth include procurement recovery, updates on the trade-in program, and new product launches [83][84]. Additional Insights - The conference highlighted the importance of monitoring ongoing VBP developments and their impact on pricing strategies within the medical device sector [16][22]. - Analysts emphasized the need for investors to consider potential risks, including supply chain issues and regulatory changes that could affect market dynamics [86][87]. This summary encapsulates the critical insights from the conference call, providing a comprehensive overview of the current state and future outlook of the China hospital equipment industry.

Investment Rating - The report maintains a "Buy" rating for both Mindray and United Imaging, indicating a positive outlook for their stock performance in the near future [82][83]. Core Insights - The procurement value of main medical devices in China has shown strong year-over-year (YoY) growth, with a month-over-month (MoM) increase of 13% in April, surpassing expectations [1]. - The report anticipates a high level of activity in medical equipment procurement throughout 2025, driven by government funding and a recovery in hospital demand [1][25]. - Mindray is expected to maintain its market leadership with multiple growth drivers, while United Imaging is projected to see significant long-term growth potential due to increasing service-related revenue [82][83]. Summary by Sections Procurement Trends - The total bidding value for nine main medical devices in China has reached a high level, with positive MoM growth observed in seven out of nine devices in March [26]. - The report notes that procurement activities are supported by government funding and the implementation of a trade-in program, which is expected to drive demand in the coming quarters [1][25]. Company Performance - Mindray's revenue growth is projected to be +10% in 2Q24, +40% in 3Q25, and +36.5% in 4Q25, reflecting a recovery in its end markets [9]. - United Imaging's management expressed optimism about the upcoming trade-in program in 2025, expecting a smoother process compared to 2024 [9]. Market Dynamics - The report highlights that both domestic and multinational companies achieved notable YoY growth in April, indicating a balanced competitive landscape in the medical device sector [64]. - The trend of domestic substitution is not particularly evident, as both local and multinational companies are performing well in the procurement market [64].