Key insights
- Morgan Stanley highlights key Chinese medical device stocks ahead of earnings, noting growth drivers like overseas expansion and innovation. Headwinds include US-China tensions and Middle East supply chain disruptions. While the report focuses on Chinese companies, broader concerns about geopolitical risks and supply chains could negatively impact sentiment towards the US medical device sector.
Investing.com -- Morgan Stanley highlighted six major Chinese medical device makers to watch ahead of their first-quarter earnings, with a focus on sequential recovery prospects, overseas expansion, and product innovation as key drivers.
The sector faces a complex landscape, especially amid heightened U.S.-China tensions and sluggish domestic growth. Supply and shipping disruptions stemming from the Middle East war also present potential headwinds.
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Mindray Bio-Medical
Morgan Stanley projects low single digit percentage overall sales growth in the first quarter, with lingering China pressures mitigated by positive overseas growth. The firm expects net profit to see a single digit percentage year-over-year decline in the first quarter, or a larger decline if accounting for foreign exchange losses. Key topics to watch for in management commentary include sequential recovery, 2026 outlook updates, channel inventory, overseas outlook, H-share listing progress, and merger and acquisition strategy.
Shanghai United Imaging Healthcare Co
Morgan Stanley projects high teens percentage overall sales growth in the first quarter of 2026 despite a high base in the first quarter of 2025, with continuous share gains. High single digit percentage net profit growth is expected in the first quarter of 2026, slightly lagging the top line. The recent Middle East conflict has had limited impacts on overseas orders so far, with largely manageable impacts on transportation. Liquid helium accounted for less than 20 percent of MR’s cost of goods sold, and the company has several alternative suppliers from other regions.
APT Medical Inc
Morgan Stanley projects approximately 30 percent overall sales growth in the first quarter of 2026, with continuous strengthening from PFA and a mild first quarter 2025 base. First quarter 2026 net profit is likely to trail lower than the top line, due to higher operating expense ratios on PFA promotion and research and development.
Shenzhen New Industries
Morgan Stanley projects single digit revenue increase in the first quarter, split as flat China sales growth and approximately 10 percent plus overseas growth. In China, average selling price is expected to drop mid-single digits percentage, largely offset by volume growth via market share gains. Net profit is expected to decline year-over-year on a tough first quarter 2025 base.
Imeik Technology Development Co
Morgan Stanley expects continual macro and competitive pressure on existing product sales in the first quarter of 2026. Margin may further deteriorate on gross profit margin pressures due to competitive-driven price cuts. Wrinkle treatment Hutox, which Imeik recently licensed from South Korean cosmetic firm Huons Biopharma, may not begin contributing to earnings until the second half of 2026.
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