On October 26, A-shares traded in a weak and rangebound manner, but the healthcare sector staged a strong breakout, with medical device stocks leading the charge. Sansure Biotech surged 9.34%, Dabo Medical climbed 7.22%, Sinocare rose 6.89%, and Mindray Medical, a giant with a market capitalization of 200 billion yuan, gained 3.63% to hit a six-month high, securing a nine-day winning streak. United Imaging Healthcare advanced 3.84%, marking its fifth consecutive day of gains. The CSI Medical Index rose 1.71% to close at its intraday high, and the Huabao Medical ETF (512170), which tracks the index, briefly broke above its annual line before successfully reclaiming both its 20-day and 60-day moving averages at the close, with active on-exchange trading and significantly expanded turnover.
Capital flows confirmed the rising热度 in healthcare. The pharmaceutical and biotech sector attracted over 4 billion yuan in net inflows from main funds throughout the day, ranking second among the 31 Shenwan Level-1 industries. Why are funds rushing into healthcare? There may be three drivers. First, improving earnings. As of now, 11 constituent companies of the CSI Medical Index have disclosed their first three quarters results, with nine profitable and seven reporting positive year-on-year growth in net profit attributable to shareholders. Dian Diagnostics and BGI Genomics saw their net profits surge by more than 750% and 335% year-on-year, respectively, while today's strong performer Sinocare posted a net profit growth of 76% year-on-year. Second, an industry turning point. Since September, domestic medical equipment procurement data has remained impressive, with cumulative improvements across subcategories. Testing service prices in Beijing, Anhui, Jiangxi and other regions have landed at generally moderate levels, and the impact of centralized procurement and pricing policies is gradually being priced out, suggesting the industry's operational inflection point may have arrived. Third, valuation repair. The CSI Medical Index currently trades at a trailing twelve-month price-to-earnings ratio of 29.44 times, still at the 18.16th percentile over the past decade, offering relatively high allocation value and ample room for recovery. Against the backdrop of continued weakness in technology stocks, oversold low-position sectors tend to attract attention.
Is the rally sustainable? China Merchants Pharmaceutical believes this round of gains is not simply an oversold rebound, but rather a re-pricing by the market of fundamental improvements in the medical device industry. After years of sector adjustment, the medical device sector is now welcoming multiple positive changes including demand recovery, improved policy expectations, and accelerating overseas growth, and it is recommended to actively monitor investment opportunities in the medical device sector. To ride the healthcare recovery trend with a single tool, investors may consider the Huabao Medical ETF (512170): a flagship pharmaceutical and healthcare ETF with a scale of 25.624 billion yuan as of its second-quarter report. It comprises 47.5% medical devices and 46.8% medical services, while also covering AI healthcare and medical aesthetics. Off-exchange feeder fund: 012323.
Data sources: public information from the Shanghai-Hong Kong-Shenzhen exchanges, China Securities Index Company, Hang Seng Index Company, etc. Weight data as of September 30, 2026. Institutional view: China Merchants Securities, October 26, 2026, "China Merchants Pharmaceutical | Medical Devices: Sector Rallies Strongly, Focus on the Resonance of Fundamental Inflection and Valuation Repair." Fund fee rates: ETF funds do not charge sales service fees. When investors subscribe or redeem fund shares, the subscription and redemption agent broker may charge a commission of no more than 0.5%, which includes related fees charged by stock exchanges and registration institutions. For fund fee rates, please refer to the legal documents of each fund. Special notice: The risk rating of the Huabao Medical ETF feeder fund as assessed by the fund manager is R4-medium-high risk, suitable for investors with aggressive risk profiles (C4) and above. The risk rating of the Huabao Medical ETF is R3-medium risk, suitable for investors with balanced risk profiles (C3) and above. Risk disclosure: The index constituent stocks mentioned in this article are for illustrative purposes only. Individual stock descriptions do not constitute investment advice in any form, nor do they represent the holdings or trading activities of any fund under the manager. The constituent stocks of the underlying index are adjusted in due course according to the index compilation rules. Any information appearing in this article, including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression, is for reference only, and investors must be responsible for their own investment decisions. In addition, any views, analyses, and forecasts in this article do not constitute investment advice in any form to readers, nor do they bear any responsibility for direct or indirect losses caused by the use of the content herein. Fund investment involves risks. Past performance of a fund does not represent its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Investors should exercise caution when investing in funds. MACD golden cross signals have formed, and these stocks are performing well.
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