The Zhitong Finance App learned that Guolian Securities released a research report saying that domestic medical devices have advantages in manufacturing, upgrading and iteration, etc., laying the foundation for products to go overseas, and the global medical device market space is broad. Going overseas for domestic medical devices can open up more room for enterprises to grow. At the same time, product pricing in overseas markets is more advantageous, which can partially avoid the pressure brought about by domestic price competition. In the past 2-3 years, overseas business has experienced a stage of rapid growth in demand, accumulation of downstream inventory, and gradual removal of inventory. Currently, overseas demand has basically stabilized, focusing on leading companies that have a first-mover advantage when going overseas.

Guolian Securities's main views are as follows:

The global expansion of medical devices has made a big difference

The global medical device market space is vast. According to Statista data, the global medical device market size in 2023 is 566.2 billion US dollars, which is 10 times larger than the domestic market. The compound annual growth rate is expected to be close to 5% in 2023-2029.

Going overseas for domestic medical devices can open up more room for enterprises to grow. At the same time, product pricing in overseas markets is more advantageous, which can partially avoid the pressure brought about by domestic price competition. Looking at leading equipment companies in countries such as Japan and the United States, overseas business expansion is also an important strategy for maintaining long-term growth and leading edge.

Domestic devices have the ability to sell globally

Domestic medical devices have advantages in manufacturing, upgrading and iteration, etc., laying the foundation for products to go overseas. In recent years, Chinese medical device companies, represented by Mindray Healthcare, have gradually grown in size. Among the top 100 device companies with global revenue in 2023, there are already 18 domestic companies.

With domestic medical device exports continuing to increase and the promotion of testing and protective products during COVID-19, the influence of Chinese medical device brands has gradually increased; leading companies have set up localized subsidiaries overseas one after another to gradually establish global sales and service channels.

Going overseas with equipment brings new opportunities to the company

Looking at product trends, domestic medical devices have achieved global leadership in some fields, such as full-body imaging MR, high-throughput sequencers, etc., and overseas exports are gradually shifting from low-end to mid-high-end; judging from regional trends, demand in emerging markets continues to increase, and market development continues to diversify.

In the past 2-3 years, overseas business has experienced a stage of rapid growth in demand, accumulation of downstream inventory, and gradual removal of inventory. At the same time, overseas demand has basically stabilized. At the same time, the accumulation of products and channels by domestic companies over the years has gradually paid off. In the first half of this year, the overseas revenue growth rate of most listed companies was higher than domestic, contributing to the main growth engine, and the globalization of Chinese medical device companies is expected to enter a period of acceleration.

Investment advice: focus on leading companies with a first-mover advantage when going overseas

The globalization of medical devices faces multiple tests such as product entry, channel construction, and after-sales maintenance, and places high comprehensive requirements on the management, operation, and financial strength of enterprises. Therefore, we recommend focusing on leading companies with competitive products and a first-mover advantage in overseas channel expansion.

Relevant targets include Mindray Healthcare (300760.SZ), a leading device manufacturer that has been deeply involved in overseas markets; Lianying Medical (688271.SH), a leading imaging equipment company that continues to break through the high-end overseas market; the new industry of IVD companies with rapid growth in overseas installations; Nanwei Medicine (688029.SH), an endoscopic consumables company with a complete global sales channel layout; Aide Biotech (300685.SZ), a diagnostic company with rapid overseas business development; and Yihe Jiaye (301367.SZ), a household ventilator company that has benefited from the reshaping of the competitive landscape.

Risk warning: policy and approval risk; market competition risk; overseas sales channel expansion risk.