The Zhitong Finance App learned that Orient Securities released a research report saying that it is optimistic that the domestic IVD market will enter the stage of improving operational efficiency after price restructuring, and that there are structural opportunities for enterprises with the ability to go overseas and provide localized services. It is recommended to focus on: 1) companies that have complete instruments and reagent platforms and can drive reagent release and cushion price pressure on conventional projects through installation; 2) enterprises with differentiated menus and high value-added project layouts, and product structures that are expected to continue to be upgraded; 3) enterprises with relatively perfect overseas registration, channel construction and after-sales service systems, which can transform export growth into regional localization management capabilities.
Orient Securities's main views are as follows:
Global market: routine projects are stable, specialty diagnosis differentiation is accelerating
2026H1, Roche's diagnostic business increased 3% year over year at a fixed exchange rate. Among them, core laboratory, molecular diagnosis, and pathological diagnosis increased 4%, 3%, and near patient-side testing (NPC) decreased 5%; Abbott's diagnostic business increased 2% year over year, with core laboratory growth of 3%, tumor diagnosis increased 13%, rapid and molecular diagnosis decreased 9% due to the high base of respiratory testing; and core revenue of Danaher's diagnostic business decreased 1% year over year, but increased 4% after excluding respiratory testing. The bank believes that global IVD has not entered a downward cycle of demand, and demand for routine testing is still in a normal growth range of about 3% to 5%, but the growth momentum is being further concentrated on early tumor screening, pathological diagnosis, and high-value molecular testing by mature biochemical and immunological projects.
Chinese market: the price system is still being reshaped, and marginal improvements are moderate
2026H1, Roche's diagnostic revenue in the Asia-Pacific region fell 5% year-on-year at a fixed exchange rate, mainly affected by China's medical price reform; Abbott also said that China's core laboratory business was still hampered by market environmental challenges; Siemens' Q2 (26Q1 in the natural year) revenue fell 7%. The company clearly indicated that it was mainly due to structural changes in the Chinese market, and the Q3 decline narrowed to 6%. The bank believes that the domestic IVD market is undergoing a rapid downturn brought about by centralized policy implementation, and is gradually shifting to a low adaptation stage under the new price system: the reform of collection and inspection fees is still expanding, product prices have not yet fully stabilized, but demand for hospital procurement and testing has gradually recovered, and enterprises have also begun to absorb the impact of price reductions through volume, cost reduction, and product structure adjustments. The current marginal improvement is mainly reflected in the narrowing of revenue declines and the restoration of profitability. It is expected that price reshaping will continue to go hand in hand with the recovery in demand.
Chinese IVD Companies: Improving Domestic Efficiency and Deepening Localization Overseas
The transparency of the domestic testing price system continues to improve. Companies need to absorb the downward pressure on conventional project prices by increasing the self-production ratio, optimizing the supply chain, and improving the ability of instruments to release reagents, and improve the product structure with high-value-added menus. In terms of going overseas, in 2025, China's exports of IVD-related reagents and instruments reached US$4.49 billion, an increase of 6% over the previous year, accounting for 6% of global related trade exports, indicating that the overseas supply of domestic products is still expanding. The bank believes that the next stage of going overseas will no longer focus on simply expanding distribution coverage, but on building localization capabilities around registration admission, clinical promotion, after-sales service and reagent supply. Companies with good cost control, differentiated menus, and overseas operation networks are expected to simultaneously benefit from improving the efficiency of domestic operations and expanding overseas markets.
Risk Alerts
There are risks such as price reductions exceeding expectations; hospital testing demand recovery falling short of expectations; high-end product registration and clinical promotion progress falling short of expectations; and overseas market expansion falling short of expectations.