Driven by the deepening global population aging, the increasing demand for diabetes patient diagnosis and treatment, and the gradual improvement of the medical insurance system, the CGM Industry will experience continuous growth.
According to Zhitung Finance APP, Minsheng Securities has released Research Reports stating that the large base of diabetes patients and worsened aging will highlight the advantages of CGM real-time blood glucose monitoring and its clinical value; in terms of application, combining with insulin pumps and GLP drugs expands the imagination space of CGM. Furthermore, at the payment end, Europe and the United States continue to expand coverage for diabetes patients, driving an increase in the volume of diagnosis and treatment. The CGM industry is in a period of vigorous development, estimating that the global market size will reach 36.4 billion USD by 2030. Driven by the deepening global population aging, the increasing demand for diabetes patient diagnosis and treatment, and the gradual improvement of the medical insurance system, the CGM industry will see continuous growth.
The European and American markets are highly prosperous, making them a battleground for CGM manufacturers. From the perspective of market size, the European and American regions, based on a high base of diabetes patients and an established commercial insurance payment system, accounted for about 70% of the global market capacity in 2023, prompting domestic manufacturers to layout in the European and American markets. The FDA and CE admission standards differ, with the core focusing on whether the product’s testing performance, such as MARD values, can meet the requirements of their respective markets, followed by the establishment of sales channels.
CGM has high core technological barriers, and patent competition is intense. CGM can be divided into Hardware and Software, where Sensors directly affect the sensitivity and accuracy of glucose concentration detection in tissues and are the core of CGM technology, while the software's algorithm calibration technology needs continuous iteration and improvement through substantial clinical data. Globally, there is intense patent competition for both, and from a quantitative perspective, DexCom has obtained 938 CGM-related patents from 2000 to 2022, while Abbott Laboratories holds 304. Overall, CGM patents among various companies are highly interspersed, with numerous lawsuits but no conclusions yet, and potential patent disputes can be avoided as much as possible through structural improvements or differentiated technical pathway choices.
A stone from another hill: DexCom: A global leader in the CGM industry that has evolved into a butterfly after twenty years of technological accumulation. Since going public in 2012, the company’s Market Cap has achieved a 70-fold increase over twelve years, mainly due to three factors: 1) On the product end: Continuous updates and iterations lead global CGM technology development; 2) On the registration end: Actively promoting product approval in major global markets; 3) On the marketing end: Expanding a global sales system. From 2006 to 2023, the company’s revenue increased from 2.17 million USD to 3.622 billion USD, with a CAGR of 55% over seventeen years.
Domestic blood glucose monitoring manufacturers are entering the CGM market, and the industry is in a period of vigorous growth. 1) Sinocare Inc.: The world’s first CGM manufacturer to adopt third-generation technology and obtain approval; the company currently has a complete range of chronic disease detection products and is beginning to form a global marketing network; 2) Microti Medical: Combines CGM and insulin pumps, poised to set sail; 3) Jiangsu Yuyue Medical Equipment & Supply: Acquired KeLiTe and entered the blood glucose monitoring sector.
Investment advice: Recommend Sinocare Inc. (300298.SZ), Microti Medical (02235), and suggest paying attention to Jiangsu Yuyue Medical Equipment & Supply (002223.SZ). 1) Sinocare Inc. is a domestic leader in blood glucose monitoring, expecting the company’s business revenue to reach 4.86/5.58/6.42 billion yuan from 2024 to 2026, with net income of 0.36/0.46/0.55 billion yuan, which corresponds to current stock price PE ratios of 40/31/27 times; 2) Microti Medical is among the first domestic companies to complete CGM product development and commercialization, expecting revenue to reach 0.35/0.56/0.94 billion yuan from 2024 to 2026, with net income of -0.1/-0.04/0.18 billion yuan, corresponding to PE of 14 times by 2026.
Risk Warning: Risks of market expansion and competition; risks of product quality control; risks of loss of R&D personnel; risks from changes in domestic support policies; risks of fluctuations in end-user demand in the Industry.
