After witnessing the huge damage and impact caused by the epidemic, governments around the world are aware of the need to strengthen public health construction and improve the ability to respond to public health crises, and a new wave of new medical infrastructure is underway.
After the normalization of the epidemic resumes, it will enter a window period
The impact of the epidemic in 2020 far exceeds that of SARS in 2003, driving the expansion of the medical industry.
The 2020 annual report has ended, and the industry has achieved explosive growth, which has further accelerated compared with 2019. Among them, the continued strong demand for varieties related to the new crown epidemic has laid the foundation for high growth, and the rapid recovery after the normalization of the domestic epidemic has brought about accelerated growth.
In 2020, the growth rate of non-deduction is ranked from high to low as low-value consumables, in vitro diagnostics, medical equipment, and high-value consumables. Compared with 2019, low-value consumables have increased significantly, mainly due to the high demand for epidemic prevention and protection products.
The rebound growth brought about by the recovery of demand after the domestic epidemic is under control will be very impressive. For example, the IVD business, which accounts for nearly half of the country, recovered to over 50% growth in the first quarter.
In 2021Q1, the medical device industry continued the high growth trend of last year, driven by the continued anti-epidemic demand and the recovery of conventional business, and grew rapidly compared with 20Q1.
At the same time, the expansion of the domestic medical device market is expected to accelerate in the next few years. In the first quarter of 2021, the company has seen large-scale new hospital renovation and expansion projects from the domestic order demand.
In the first quarter of this year, the continuous growth in the performance of domestic medical companies was mainly due to the good control of the domestic epidemic situation, the gradual recovery of hospital procurement, and the significant recovery in routine diagnosis and treatment activities, physical examinations, and elective surgeries, which led to a significant recovery in domestic demand for routine reagents and strong growth in in vitro diagnostic business. ;
And under the circumstance that the international epidemic continues to repeat, the demand for epidemic-related products such as ventilators, monitors, and infusion pumps is still strong.
The development trend of the molecular segment
In 2021Q1, the growth rate of non-deduction is ranked from high to low as low-value consumables, in vitro diagnostics, high-value consumables, and medical equipment.
①Low-value consumables: There is a regional outbreak of the new crown epidemic, and the demand for varieties benefiting from the epidemic continues to be strong. Due to the continuous shortage of laboratory consumables production capacity in the short term and the slow expansion of production lines, the quality of domestic consumables products will improve in the long run, and the market share may further increase.
②In vitro diagnosis: The normalized output of the new crown business, and the routine testing continued to stabilize. Under the control of the domestic epidemic, enterprises have resumed work and production smoothly, the volume of hospital diagnosis and treatment has gradually recovered, and routine testing business has gradually resumed.
③Medical equipment: Overseas anti-epidemic demand continues to be strong, and new medical infrastructure drives a new round of growth. The demand for anti-epidemic equipment such as ventilators and infrared forehead thermometers in the international market continued to be strong, and the sales of related products of enterprises remained high; the sales of household appliances such as blood sugar and blood pressure monitors accelerated from the impact of the epidemic.
④High-value consumables: Damaged business recovers quickly, and the impact of centralized procurement tends to ease. The revenue growth rate declined mainly due to the impact of the epidemic in the first half of the year, but the profit side still maintained high growth.
Domestic substitution + independent innovation accelerates
The “2021 Departmental Budget of the National Health and Health Commission” recently released by the National Health and Health Commission emphasizes that while vigorously reducing general expenditures in accordance with the relevant requirements of living a tight life, the comprehensive reform of public hospitals, the improvement of the medical service capacity of budget hospitals, and the Expenditures for improving public health service capacity, foreign aid, and some normalized epidemic prevention and control are reflected in relevant expenditure items.
From the new construction of hospitals and departments to the intelligent upgrade of hospitals, relevant deployments in various places support the expansion of the medical device market.
With the acceleration of the trend of “domestic substitution + independent innovation”, China’s medical device industry is also expected to usher in the next 30 years of rapid development.
At present, the medical device industry is also entering another “golden period, and showing the trend of “domestic substitution + independent innovation” at the same time.
From the perspective of market space, the main income of medical device manufacturers in my country is expected to exceed one trillion yuan in 2021-2022, and the compound growth rate in the next 10 years will exceed 10%, which is expected to open a new golden decade for medical devices.
In the past three decades, rapid growth has benefited from the burst of dividends for domestic engineers after the reform and opening up;
In the future, domestic enterprises are expected to make further breakthroughs in deep-water areas and even unmanned areas through the integration of technical capabilities, supply chain capabilities, channel capabilities, multi-product, multi-production line collaboration capabilities, and intelligent analysis capabilities, and ultimately form competition in the field of research and development Advantage.
Judging from the data, at present, for equipment consumables, the localization substitution rate of low-value consumables is the highest, and the domestic proportion has reached 90%.
However, domestic substitution in the field of IVD and high-value consumables is still in active progress, with the proportion of the former being close to 40%. Among the high-value consumables, domestic cardiovascular interventional devices and orthopedic interventional devices have begun to show their heads.
Therefore, policy dividends are promoting the localization of the IVD industry, which will gradually become the infrastructure of future hospitals, and the domestic IVD market is in the golden age of import substitution.
Compared with developed countries, my country’s ultrasound medical imaging equipment industry started relatively late, but after years of development, it has formed an industrial system with complete professional categories and excellent basic technology.
Looking ahead, in the mid-to-low-end market, the procurement of grassroots hospitals under hierarchical diagnosis and treatment is expected to drive continuous volume growth. With the accelerated construction of grassroots hospitals, the demand for mobile DR has been increasing, and it is expected to become a new growth point in the field of medical imaging.
In recent years, the informatization construction of hospitals is an important trend in the development of domestic hospitals, from the construction of informatization systems for hospital business management, to telemedicine technology, and then to the construction of smart hospitals.
5G drives the upgrade of medical and health services
At present, the development level of new hospital infrastructure in China is only prominent in telemedicine and hospital business.
With the continuous improvement of 5G network coverage, the new hospital infrastructure will penetrate into the overall operation management of the hospital, as well as the daily medical behavior.
The development direction of new medical infrastructure in the future may make the boundaries between the inside and outside of the hospital become more and more blurred.
Medical services have been extended to the outside of the hospital through the process of informatization, and will gradually extend to all aspects of patient prevention, treatment, and rehabilitation;
At the same time, the target group for the hospital to serve patients will continue to expand. With the maturity of 5G construction and development and the real implementation of new medical infrastructure projects, the hospital will develop to be able to provide patients with full-life-cycle medical and health services in the future.
Building a public health system is a long-term issue
my country’s CDC should need a relatively independent system at the national and provincial levels, but it is not necessary to build an independent disease control system at each level.
Disease control institutions at all levels from the provincial level down should be integrated with the medical system, otherwise the compensation for disease control income will easily not be in place, which will lead to a vicious circle of brain drain.
But now, the clear and complete infrastructure of the disease control system is actually strengthening the split between the two systems.
This round of new medical infrastructure will of course strengthen the hardware conditions of China’s medical system and public health. But in general, those things in the entire system that are particularly weak or need urgent investment to make up for, still need to be constantly updated and developed.
Conclusion: The new medical infrastructure layout will continue to be invested
As the second largest economy in the world, the proportion of medical investment in GDP in China is significantly lower than that of developed countries in Europe and the United States, and the gap is still huge. The construction of new medical infrastructure will continue to increase investment.
Primary care, hierarchical diagnosis and treatment, and digital healthcare all have huge market prospects, and will usher in a golden age of new medical infrastructure development.
Reference for some data: Zhongtai Securities: “Anti-epidemic Demand Continues to Release, New Medical Infrastructure Drives New Growth”
Some pictures from: Zhongtai Securities Research Institute