HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Executive SummaryWith the natural growth of the population and the inevitable trend of population aging, the demand in the healthcare industry will continue to rise. In addition, the improvement of people’s health consciousness, the upgrade of medical consumption and related favorable policies are the core factors driving the demand of China's medical device industry. Over the past five years, the global medical device market has maintained an annual growth rate of about 5%, while the growth rate of China's medical device market was more than 15%. It is expected that the gap between China and the global medical device market size would be gradually narrowed and China’s medical device market would play a more important role in the future. Therefore, the investment opportunities in China medical device market are very attractive and unmissable. On the other hand, with the promotion of the centralized procurement of high-value medical consumables nationwide, related medical device companies are facing pressure. So, how to find valuable investment targets that can avoid the influence of government's centralized procurement policy is important to investors. This Original mainly analyzed good investment opportunities, the industry characteristics, the investment rationale and the potential risks.What’s Original?We have identified the following investment opportunities in the Health Care Equipment and Services category in MSCI China:<ul>
<li>
<a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a>: Mindray is the largest medical device and solution supplier in China. Its three core businesses are all in the forefront in China, and is also one of the few domestic companies that is truly capable of achieving import substitution and internationalization and could compete with overseas giants. Meanwhile, because of the Company's business layout, Mindray is not greatly affected by the centralized procurement policy in the short term. Together with the strategy of “innovation + M&amp;A + internationalization”, Mindray has formed the high moat and become the industry benchmark.</li>
<li>
<a href="https://www.smartkarma.com/entities/ovctek-china-inc" target="_blank" data-smartkarma-citation="entities:29638:1" rel="noopener">Ovctek China Inc (300595 CH)</a>: OVCTEK is the leading company in China orthokeratology lens market, with broad market prospect. Considering the high prosperity of the industry in which the Company is located, the good competition pattern, and the low penetration rate of orthokeratology lens, OVCTEK is expected to continue to maintain rapid growth in the future. Meanwhile, because the products have strong consumption attributes, OVCTEK’s business will not be affected by the centralized procurement policy. The obvious product performance advantage, the strong sales channel and the large market potential are the drivers for revenue and margins.</li>
<li>
<a href="https://www.smartkarma.com/entities/jafron-biomedical-co-ltd" target="_blank" data-smartkarma-citation="entities:29575:1" rel="noopener">Jafron Biomedical Co Ltd (300529 CH)</a>: JAFRON is the leading company in the field of hemoperfusion in China. As there are very limited competing products in the market, the Company is currently in a monopoly position of hemoperfusion cartridge, with strong pricing power and over 80% gross margin for more than five years. In addition, there is still a lot of room for growth in the hemoperfusion cartridge market, together with the strong product competitiveness, and the technical, raw material and channel advantages, JAFRON has established a high moat in this market.</li>
</ul>The pecking order is: Mindray, OVCTEK and JAFRON.

Executive SummaryWith the natural growth of the population and the inevitable trend of population aging, the demand in the healthcare industry will continue to rise. In addition, the improvement of people’s health consciousness, the upgrade of medical consumption and related favorable policies are the core factors driving the demand of China's medical device industry. Over the past five years, the global medical device market has maintained an annual growth rate of about 5%, while the growth rate of China's medical device market was more than 15%. It is expected that the gap between China and the global medical device market size would be gradually narrowed and China’s medical device market would play a more important role in the future. Therefore, the investment opportunities in China medical device market are very attractive and unmissable. On the other hand, with the promotion of the centralized procurement of high-value medical consumables nationwide, related medical device companies are facing pressure. So, how to find valuable investment targets that can avoid the influence of government's centralized procurement policy is important to investors. This Original mainly analyzed good investment opportunities, the industry characteristics, the investment rationale and the potential risks.What’s Original?We have identified the following investment opportunities in the Health Care Equipment and Services category in MSCI China:

Shenzhen Mindray Bio-Medical Electronics (300760 CH): Mindray is the largest medical device and solution supplier in China. Its three core businesses are all in the forefront in China, and is also one of the few domestic companies that is truly capable of achieving import substitution and internationalization and could compete with overseas giants. Meanwhile, because of the Company's business layout, Mindray is not greatly affected by the centralized procurement policy in the short term. Together with the strategy of “innovation + M&amp;A + internationalization”, Mindray has formed the high moat and become the industry benchmark.

Ovctek China Inc (300595 CH): OVCTEK is the leading company in China orthokeratology lens market, with broad market prospect. Considering the high prosperity of the industry in which the Company is located, the good competition pattern, and the low penetration rate of orthokeratology lens, OVCTEK is expected to continue to maintain rapid growth in the future. Meanwhile, because the products have strong consumption attributes, OVCTEK’s business will not be affected by the centralized procurement policy. The obvious product performance advantage, the strong sales channel and the large market potential are the drivers for revenue and margins.

Jafron Biomedical Co Ltd (300529 CH): JAFRON is the leading company in the field of hemoperfusion in China. As there are very limited competing products in the market, the Company is currently in a monopoly position of hemoperfusion cartridge, with strong pricing power and over 80% gross margin for more than five years. In addition, there is still a lot of room for growth in the hemoperfusion cartridge market, together with the strong product competitiveness, and the technical, raw material and channel advantages, JAFRON has established a high moat in this market.
The pecking order is: Mindray, OVCTEK and JAFRON.

Investment Opportunities in China Medical Device Industry

Bespoke Research on China and neighbouring regions, Bixmoor

Bixmoor

Bespoke Research on China and neighbouring regions

Bixmoor specialises in providing bespoke research to business, governments and the financial community on China and neighbouring regions. We seek to build long-term relationships with our clients, based on our expertise, our reliability and our determination to find the right solution.

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

Falling Fertility Adds to China's Population Woes

Faced with dramatically falling birth rates, Iran has introduced a wide range of pro-natalist policies. In contrast, China has been half-hearted in the policies it has introduced and continues to boast about its family planning services.

Faced with dramatically falling birth rates, Iran has introduced a wide range of pro-natalist policies. In contrast, China has been half-hearted in the policies it has introduced and continues to boast about its family planning services.

Iran Shows China the Way on Population Expansion

Air quality in China appears to have improved slightly in recent months. However, it is still well above World Health Organisation recommended levels and could lead to an estimated 4-5 million premature deaths by 2030

Air quality in China appears to have improved slightly in recent months. However, it is still well above World Health Organisation recommended levels and could lead to an estimated 4-5 million premature deaths by 2030

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China’s state media reported this week that Han Chunyu’s scientific results on genome editing which were published in Nature Biotechnology in May have been <a href="http://www.globaltimes.cn/content/997584.shtml" target="_blank">widely criticized</a> internationally. Han Chunyu was the “<a href="http://www.scmp.com/news/china/policies-politics/article/1947214/rise-underdogs-why-low-funded-unknown-researchers-are" target="_blank">nobody scientist</a>” in Hebei of whom no one had heard and was not practicing at prestigious Peking or Tsinghua Universities.
Almost all the overseas scientists criticized the Han Chunyu science, with the apparent exception of MIT. The feedback came from Australia, the USA and elsewhere.
On…
</div>


China’s state media reported this week that Han Chunyu’s scientific results on genome editing which were published in Nature Biotechnology in May have been widely criticized internationally. Han Chunyu was the “nobody scientist” in Hebei of whom no one had heard and was not practicing at prestigious Peking or Tsinghua Universities.
Almost all the overseas scientists criticized the Han Chunyu science, with the apparent exception of MIT. The feedback came from Australia, the USA and elsewhere.
On…


China

Shinva Medical Instrument Co., Ltd. manufactures and markets medical instruments and equipment.  The Company's products include sterilization equipment, radiation diagnosis and radiotherapy equipment, chemical indication products, and medical environmental protection equipment.

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Shinva Medical Instrument A (600587 CH)

Investment Opportunities in China Medical Device Industry

This Original mainly analyzed good investment opportunities, the industry characteristics, the investment rationale and the potential risks in...

Xinyao (Criss) Wang

Falling Fertility Adds to China's Population Woes

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of...

Bixmoor

Iran Shows China the Way on Population Expansion

Faced with dramatically falling birth rates, Iran has introduced a wide range of pro-natalist policies. In contrast, China has been half-hearted in...

Bixmoor

Small Improvement in China Air Quality

Air quality in China appears to have improved slightly in recent months. However, it is still well above World Health Organisation recommended...

Bixmoor

Critique of Genome Scientific Work

China’s state media reported this week that Han Chunyu’s scientific results on genome editing which were published in Nature Biotechnology in May...

Bixmoor

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)