Group 1 - Medical device sector shows strong performance with ETF fund (159797) experiencing significant trading volume and net inflow of funds [1] - Recent policy document issued on June 9 aims to improve healthcare resources and insurance mechanisms, which is seen as a major driver for pharmaceutical companies [3] - Citic Securities predicts a trend of low-to-high earnings growth in the medical device sector, with significant improvements expected in the second half of the year [4] Group 2 - Structural investment opportunities exist within the medical device sector, with certain companies expected to achieve high growth in Q2 and Q3 [5] - The easing of US-China tariffs is beneficial for medical device companies, potentially lowering production costs and expanding overseas market share [6] - The medical device ETF fund (159797) covers core areas such as medical equipment and in vitro diagnostics, with top ten weighted stocks accounting for 46.78% [6][7]

Investment Rating - The report maintains a "Buy" rating for the healthcare services industry [6]. Core Insights - The easing of tariffs between China and the U.S. is expected to lead to a valuation recovery for the CXO sector, which has been under pressure due to previous tariff escalations [2]. - The tariff relief is anticipated to lower production costs for medical devices, enhancing competitiveness in overseas markets, particularly in the U.S. [3]. - The report suggests that domestic companies in the medical device sector are well-positioned to capture market opportunities in the U.S. due to increased demand for cost-effective products [3]. Summary by Sections CXO Sector - The impact of U.S.-China tariffs on the CXO sector is complex, with CRO services not directly affected by tariffs but facing uncertainty regarding future tariff increases [2]. - CDMO companies are also navigating complex influences, as their clients are often multinational firms with production bases outside the U.S., allowing them to mitigate tariff impacts [2]. Medical Devices - Domestic companies have made significant advancements in high-end medical equipment and diagnostics, gradually replacing imports [3]. - The tariff easing is expected to stabilize supply chain costs and improve the global market competitiveness of Chinese medical device manufacturers [3]. - There are specific opportunities in the U.S. market, particularly in price-sensitive segments and high-end equipment, where reduced tariffs could facilitate market entry [3]. Investment Recommendations - The report recommends focusing on companies with significant exposure to overseas CRO and CDMO markets, such as WuXi AppTec, and those with substantial U.S. sales in medical devices, like Yihua Jaye [4]. - Companies with strong international expansion capabilities, such as Aihua Long and Shengxiang Biology, are also highlighted as potential investment opportunities [4].