On November 18, the medical device sector continued to pull back 0.37%. Since August, the medical device sector has recovered 14.45% after the previous surge, and individual stocks have also diverged.
If we extend the dimension for two years, this may be a technical correction in the medical device sector. For the Chinese stock market, which has always favored drinking and taking medicine, the concept of medicine is extending from pharmaceutical manufacturing to medical equipment.
In fact, the medical device industry not only represents high-quality development and high-level profitability, but also bears the important task of "taking people out" from major diseases. If life is a race between time and technology, then the medical device industry is a life-related super track.
After the medical device sector has soared by 189% in the past two years, institutions have short-term differences on this, and the short-term correction is completely understandable. But when we review the dimensions of the growth pattern of the global medical device industry, we will see that it will still be "the unique landscape of China."
In the super track of medical devices, since 2016, the global medical device market has been stable, with a growth rate of around 5%, and the growth of the major giants is weak. On the other hand, the country's high spirits, with a year-on-year growth of more than 15%, still have good growth expectations in the next 5 to 10 years. It can be said that the development of global medical equipment depends on China. This will also accelerate the rise of the leading Chinese medical equipment industry, and even accelerate the rise of the leading Chinese medical equipment industry in the global PK competition.
The world enters a plateau: the weak giant
In recent years, global economic growth has been weak, but the medical device industry has been able to maintain steady growth.
As an industry indicator, the market scale has important reference significance. According to a report by iiMedia Consulting, in the past 2019, the global medical device industry reached US$451.9 billion, a year-on-year increase of 5.33%. The market size is expected to reach 477.4 billion US dollars in 2020, entering a stage of steady development.
This estimate is based. Since 2016, the scale of the global medical device market has continued to increase, with year-on-year growth rates fluctuating around 5%. In the global market, the United States occupies the world's largest market share, accounting for more than 40%, and China accounts for about 18%. There is still a lot of room for development.
The global market is developing steadily, and international giants have entered a bottleneck period of weak growth. For example, Medtronic, the world's No. 1, revenue increased from 29.7 billion in 2017 to 30.5 billion in 2019, a cumulative increase of only 2.7%, a very low compound growth rate. Another example is Johnson & Johnson, Philips, and GE Healthcare in the top 2-4. The growth in 2019 was only 1.9%, 6.5%, and 3.1% respectively.
It should be noted that the lack of growth of the medical device giant does not mean that its dominance in the medical device market has declined. A set of data in 2017 shows that the world's top 10 medical device companies accounted for 37% of the market share, and the top 30 accounted for 63% of the market share. The market concentration is quite high.
The dominance of medical equipment giants is still strengthening. A set of data from the Prospective Industry Research Institute shows that in 2016, the top 20 domestic medical equipment invested a total of US$340 million in research and development, accounting for an average of 4.51% of revenue.
At present, among the domestic high-end medical equipment, CT machines, ultrasonic equipment, testing equipment, magnetic resonance equipment, electrocardiographs, mid-to-high-end monitors, and high-end physiological recorders account for about 80%-90% of imports. At the same time, about 70% of the high-end medical device product market is occupied by foreign capital.
This shows a truth, the global medical equipment market is growing steadily, and enterprises in any country will not sit back and enjoy it. If you want to catch up with the sluggish international giants, you need not only the domestic policies, but also the hard power of the company's own scientific and technological research and development. From these two aspects, the Chinese market has the best chance to cultivate world giants.
Looking at China in the future: how much room for growth?
Since 2015, China's medical device market has gradually expanded. In 2019, the size of the Chinese market increased by 18.5% year-on-year to 628.5 billion yuan, and is expected to reach 734.1 billion yuan in 2020, a growth rate of 16.8%. From the perspective of growth data, China's medical equipment market does have the meaning of "the landscape is better".
The growth of China's medical equipment market is not short-lived. Some institutions predict that the domestic medical device market is expected to exceed one trillion yuan in 2022. The rapid development of the Chinese market is inseparable from the promotion of policies and the promotion of economic development and social demand.
The reform of the medical system has also promoted the development of the medical device industry. The upgrading of medical devices at all levels of health institutions brought about by hierarchical diagnosis and treatment has put a huge demand on medical device products. Li Xiting, chairman of Mindray Medical, once judged that the domestic medical device industry has entered a "golden decade."
An epidemic in 2020 has changed the public's consumption concept of medical devices, and the call for domestic substitution in the medical device industry is getting higher and higher. During the epidemic, the demand for low-value consumables such as masks and protective clothing surged, and the supply of diagnostic reagents, life monitoring and support systems exceeded demand. my country's medical equipment industry has exposed shortcomings such as insufficient support capabilities for high-end medical equipment.
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