The chairman of United Imaging (联影医疗), Xue Min (薛敏) has announced during the 2019 World Health Expo that his company will set up a CNY 5 billion worth R&D center in Wuhan. The facility is expected to be 200,000 square meters and the biggest one in the industry.
The company has already been producing and developing several kinds of diagnostic products, radiotherapy products and healthcare IT solutions. With the establishment, the R&D base will help United Imaging further fortify its already strong position in the med-tech industry. By doing so, United Imaging is preparing to target the Chinese market that is already greater than a trillion yuan.
However, several global companies are targeting the China market with billions of sales revenue, such as Medtronic and Philips Group. The competition further escalates concerning the R&D investments as well; the world’s most prominent medical technology provider, Medtronic, has spent around CNY 15 billion on research and development as of 2018.
According to the Chairman; the R&D facility will create additional financial value in several other industries by creating a high-tech industrial chain in Wuhan. The company already produces several high-value-added diagnostics, such as MI, MR, CT and DR machines. What’s more, United Imaging recently introduced its medical cloud product, uCloud, to create a national diagnosis and treatment system in China. At present, the uCloud connects more than 1700 medical institutions in 19 cities across the country, covering more than 100 million people.
Medical cloud is particularly beneficial for the regions that have significant development level differences to exchange medical data within these different regions. China is seen especially suitable for the utilization of Medical Cloud. Diagnostics Imaging is the third biggest area in device sales in med-tech after In Vitro Diagnostics (IVD) and Cardiology products. Last year, Diagnostic Imaging products’ global market share within the entire sector was around 10% with USD 40 billion worth of sales. In general, United Imaging has a strong market capacity with several global competitors.
So far, United Imaging has already secured more than CNY 3.3 billion total funding in Series A from major Chinese Investment Banks, such as CICC and CITIC Securities. The company has three offices in the USA and currently in a fast-paced growing period. However, it will be reasonably arduous for United Imaging to dominate in the global market.
Several companies from Japan and the United States are already dominating the sector with their cumulative technical and financial capacity. It is reasonable for the company to invest heavily in R&D to catch up with its global competitors. Wuhan investment can be read from this perspective.