(From Science News Network)

At present, China's medical device market has exceeded 100 billion yuan, with an average annual growth rate of about 23%, and the market size is expected to reach 340 billion billion yuan by 2015. It is worth noting that compared with the global medical devices accounting for 42% of the total size of the pharmaceutical market, China's medical devices accounted for only 14%.
Medical devices, this is a "developmental" industry.
Health care, education and housing have always been the three major livelihood topics. As an important support point for building a medical system, the medical device industry has attracted more and more attention. When the concept of "urbanization" has been focused on interpretation, the relevant beneficiary industries have been excavated by the market, which also includes the medical device industry. The increase in demand for medical services brought about by deep urbanization will be 200 billion yuan, and the increase in government-led medical service supply will be about 250 billion yuan. In addition, the Ministry of Health promised in August 2012 that the average annual medical system will exceed 10 times in 2008. Special funds, etc., the medical device industry driven by multiple factors, may achieve "rapid development".

    Multiple Factors Driving the Growth of Medical Devices
From a policy point of view, after the Ministry of Science and Technology issued the "Twelfth Five-Year Plan for the Medical Device Technology Industry", on August 17, the Ministry of Health released the "Healthy China 2020 Strategy Research Report", which mentioned that the next 8 years will be The launch of seven major medical system projects involving as much as 400 billion yuan has refreshed the spirits of investors who are concerned about the medical device industry, because 109 billion yuan was clearly used in the construction of county hospitals. In 2008, the funds allocated for investment in the medical system were 4.8 billion yuan, and there will be an average annual special fund of 50 billion yuan in the next 8 years, 10 times that of 2008. In fact, the above-mentioned county hospital construction plan actually complements the previous medical reform and the "urbanization" that is now being interpreted with emphasis. The process of urbanization naturally involves the construction and upgrading of the medical system, and it is reasonable for medical devices to benefit. "There must be opportunities for county-level hospitals." Nowadays, domestic and foreign medical device manufacturers are also keeping a close eye on the market of county hospital construction.
In addition, from the perspective of trends, first of all, the aging trend has ensured an expanding market for some specific medical devices such as oxygen supply machines and blood glucose meters. The second is medical reform. It is mentioned in the 12th Five-Year Plan of the State Council that by 2015, the number of beds and service volume of non-public medical institutions should reach 20% of the total number of medical institutions. Under the background of the continuous expansion of medical security, the addition and purchase of medical devices by private medical care will also well promote the development of the industry. Thirdly, the new GMP plan, for example, the new GMP requires high requirements for sterile preparation enterprises and requires all of them to be passed by the end of 2013. Finally, substitution is required. Nowadays, many high-end medical devices are mostly imported from abroad, and with the gradual upgrading of technology, domestic high-end medical devices have gradually gained substitution strength.
 
　　Benefit from the concept of "urbanization"
If we take "urbanization" and "medical reform" as an opportunity to excavate, the listed companies that generally benefit can be divided into engineering, chain and equipment.
First, to match the size of new towns or private institutions, the demand for medical engineering will increase significantly. For example, Shangrong Medical, a clean operating room expert, signed a contract in 2012 involving as much as 2.678 billion yuan, 7.68 times the annual operating income in 2011. Dongxing Securities analysts once stated in their research reports that since its listing, the number of orders for more than 100 million yuan in Shangrong Medical has increased significantly. This first-mover advantage and brand effect are likely to form a Matthew effect where the stronger the stronger.
Second, in the process of expansion, listed companies with similar chain nature of hospital assets also get the opportunity.
"Compared with public hospitals, the government encourages the development and expansion of private hospitals." For example, like Aier Ophthalmology. As for public hospitals, although the policy does not encourage them to borrow money for construction, it still has its own motivation, because it is related to the rating of the hospital, and it is also necessary to consider factors such as the overall upgrade cycle of the industry. According to the data, Aier Ophthalmology has 42 chains nationwide (as of the end of July 2012), mainly carrying out diagnosis and treatment projects such as eye treatment, cataract surgery, corneal disease, medical optometry, eye trauma, etc., of which myopia surgery is especially large. Another example is Dean Diagnosis, which takes the outsourcing of medical diagnostic services as its core business, more than 1000 medical diagnostic services including biochemistry, enzyme immunity, radioimmunoassay, PCR, fluorescence immunity, etc. can be carried out. Currently, 10 laboratories have been operated (data reported in 2012), and 4 other regions have obtained laboratory approval. Similar listed companies are still in the economically developed areas for the deep cultivation of the field of oral hospital general policy medical care, as well as in the queue state of Ciming medical examination.
In addition, the benefits of equipment in the development of urbanization cannot be ignored, such as Yuyue Medical, the leader of household medical equipment that is often mentioned by the market. According to the data, Yuyue Medical produces as many as 36 varieties and 225 specifications. Among them, ultra-light oxygen valves, atomizers, sphygmomanometers, stethoscopes and other products have the first market share in China, and wheelchairs are domestic. second. Similar stocks include Sannuo Biology, which overlaps with Yuyue Medical in blood glucose meter business, Libang Instruments, which has made great achievements in obstetrics, ECG, monitoring and ultrasound imaging, and Dongfulong, which specializes in medical freeze-drying machines and freeze-drying systems. Its main products are Yangpu Medical, the third generation vacuum blood collection system. David Medical and Bohui Innovation Focusing on Infant Market.
 
　　Import substitution, upgrading and transformation of the "money scene"
In addition, in addition to the normal growth of the market size, the medical device industry also has two major opportunities for import substitution and upgrading.
For example, Kelitai, established in 2005, became a company with complete independent production technology and capability of vertebral expansion balloon components in 2007 based on the research on polymer materials science. Taking advantage of the advantages of cost performance and channels, it started the process of import substitution.
The same story also happened to Guanhao Biology. Data show that in 2008, the market share of Guanhao Biology dural patch was 32%, and in 2010 it was 40% ~ 45%. For imported brands such as Braun Medical in Germany and Johnson & Johnson in the United States, the market share in 2008 was 45%, but in 2010 the figure was only 25% ~ 30%. So, can this story be repeated? Industry insiders say, the answer is yes.
For example, at present, Hainan Haiyao, a subsidiary of Shanghai Shengli, is on the road of import substitution. Data show that Shanghai Li Shengte is the first company in China to pass clinical trials, and its most promising competitor, Norcon, may not enter the market until the end of 2013.
According to the evaluation of the incremental market and stock market for newborns and the elderly, it is estimated that the demand for cochlear implants will be about 224000 sets per year in the near future. According to the calculation of 50000 yuan per set, the market size will be 11.2 billion yuan per year. "The market is big enough that there will be explosive growth in the next few years."
Recently, Lepu Medical, which has further acquired a stake in Qin Ming Medical, has become the controlling shareholder of Qin Ming Medical with a 75.1 per cent stake, while Qin Ming Medical has a domestic approval for a pacemaker. For a long time, Chinese pacemakers have been mainly imported from Europe, and the import volume has increased steadily. Import substitution has always been the direction of development of various enterprises, and Lepu Medical obviously has a first-mover advantage in this field. According to some brokerage research reports, the dual-control pacemaker currently developed by Qin Ming Medical is expected to be introduced to the market in about two years.
As for upgrading, for example, due to the high requirements of the new GMP for sterile preparation enterprises, the new GMP must be passed before the end of 2013, which is bound to lead to the transformation and renewal projects of various enterprises. The production lines of large infusion and small water needle are all sterile Qianshan medicine machines, which will naturally benefit from them.