Domestic Substitution & a Heated Capital Market
The Chinese medical device industry is catching up in an unstoppable manner.
China's medical devices field has never been considered a high-end market – not even now. But the climate and circumstances are changing very fast. In the old days, advanced medical devices were all imported and provided for inland consumers under strict controls. As for technology, talents and capital are becoming one force; domestic substitution has become an unstoppable trend. It implies the upcoming rise of the industry and the high-speed growth of those local companies in the medical devices industry.
Since 2018, China has become the fourth largest medical device market worldwide, following the US, western Europe and Japan. As the population ages, domestic demand is expected to expand further. Moreover, after the recent accelerated economic development, people require higher-end healthcare services and products. The gap between consumer expectations and actual supply drives industry players to flow into a more sophisticated market.
To catch up on the wind of medical devices, investors need to know which particular segments in the broad industry to aim for and what companies are performing well in the Chinese market. Thus, EqualOcean analyzes the macro-level drives, pinpoints benchmark companies in the top three limelight segments and assembles lists of promising picks.
After the analysis, we believe the medical device industry in China is a relatively ‘dormant’ gold mine with the full potential to be exploited. Since the outbreak of COVID-19, China has depicted a very resilient economy and a dynamic market. The anti-fragile capability is rooted in a relatively stable society and consumption potential of the large-number population.
In this report…
We have applied a blended methodology in our research and analysis.
In the first chapter, Market Dynamics, we primarily use the PEST matrix to constitute the analytical framework for comprehensive coverage. Besides, the data-driven analysis in the report outlines China's capital and investment flow and policy overview.
In Chapter 2, Fast Growth & Multi-baggers, we choose one benchmark company for each particular segment – medical imaging, heart stents and orthopedics. With a detailed financial look into these target examples, we build multiple models to reevaluate companies.
In Chapter 3, we pick out the top 15 public medical device companies and 15 most noteworthy private companies. These 30 companies represent the current and future look of the industry.
What is the next step for these industry players?
It can be a mixed strategy:
1) taking back the domestic dominance in the high-end market by lower price;
2) expanding overseas market by relatively high-quality products, especially in developing markets.
Some exhibits in the report,
Target market 1: Medical equipment market. (Shown in the analysis of Mindray Medical)
Target market 2: Cardiovscular intervention devices market. (Shown in the analysis of Lepu Medical)
Target market 3: Orthopedics implants market. (Shown in the anaysis of Weigao Group)
Public company picks
Private company picks
Companies mentioned in this report:
Beijing Aerospace Changfeng
Guangdong Biolight Meditech
Blue Sail Medical
New Horizon Health