China\\ s medical device industry have been strong, multinational companies rely on technical superiority to accelerate the penetration of rural areas, while the concentration in the low-end market, domestic enterprises are highly profitable field of hard to break. \"Monopoly of multinational high-end, domestic SMEs account for the low-end\" of the balance of pattern, is expected to subversion.
First five months of 2011, four medical device companies Tung Fu Long (300171, stock it), yet the medical wing (002,551, stock it), Qianshan medicine machine (300216, stock it), the rationale for the state apparatus (300,206, stock bar) were landing GEM or small plates, price-earnings ratio of more than 45 times, Tung Fu Long is the issue of up to 96 times earnings. In these companies successful IPO behind lurks a lot to provide strategic or financial support of venture capital institutions, many of whom Fosun (600,196, stock it), deep venture capital and other well-known venture capital companies (Table 1). Momentum has grown in the healthcare industry, medical equipment sub-sectors of the charm gradually.
IPO, the investment and financing in the field events also accelerated warming. Investment in the Group\\ s latest data show that: in January 2010, April 2011, medical devices and the number of cases of private equity financing in the amount of medical and health industry accounted for respectively 23%, 18%, respectively, second only to the traditional strength of the pharmaceutical industry. The pharmaceutical industry\\ s first RMB fund CCB International medical industry funds, spend 100 million yuan following the injection of the vaccine packaging supplies companies Jiang Yin Lanling cork, the ED also Wuliangye (000,858, stock it) Pashtoon\\ s pharmaceutical plastic packaging business investment by 1.8 million.
Medical devices or ultra-pharmaceutical market growth
Funds favor logic, not only to China\\ s medical reform introduced the medical and biological context of the industry into the rising channel, but also from the development of medical device sub-sector potential. Data show that the global consumption of pharmaceuticals and medical devices ratio is about 10:7, while Europe and other developed countries has reached 1:1.02. But in China, \"drug dependent doctors,\" the traditional model, the pharmaceutical market is far more than the medical device market, the development of both capacity and the depth does not match the structure of the future of the pharmaceutical industry will occur within the trend changes. Drug spending accounted for the rise unsustainable, and medical devices in the medical sector is expected to rise in the proportion.
In recent years, the data related to corporate profitability further evidence of this, pharmaceutical industry analyst with Guoxin Securities, He Ping pigeon studies have shown that from 2001 to 2008, the medical device industry compound annual growth rate of revenues and profits were 28% and 41 %, much higher than the pharmaceutical industry 19%, 21% of the revenue and profit growth. CICC expects ,2009-2015 Sun Liang of China medical device industry compound annual growth rate will remain at 20-30%, the growth rate much higher than the SW Luo pharmaceutical industry analyst forecast of consumption of drugs between 2008-2015 16% compound growth rate of SWS while drug costs are expected proportion of total health costs from 33 percent in 2007 to 20% in 2040.
Import substitution and in the process of upgrading, China\\ s medical device industry is also expected to occupy more market share in the world. Currently, the global medical device market size of about $ 350 billion, of which the developed countries control 78%, but with China as the representative of the emerging market countries are experiencing rapid growth. From the State General Administration of Customs statistics show that China\\ s medical equipment import and export in 2010 amounted to $ 22.656 billion, an increase of 23.47%. Among them, exports 14.699 billion U.S. dollars, up 20.05%; imports amounted to $ 7.957 billion, an increase of 30.35%, the trade surplus to $ 6.7 billion.
Expansion of the cake before the trend of the market competing more intense. With the dividend policy of the rural market to foreign investors coveted endless, but highly profitable high-end equipment market is enough to make low-end price war trapped in domestic enterprises jealous. With both sides extending to other spheres of influence, the balance of the original change in the situation is brewing.
Foreign capital to accelerate the market penetration of primary
Rapid development of China\\ s medical device industry, foreign investment, joint ventures have become the main force, the top 10 export enterprises, foreign investment and joint ventures have seven. In the domestic large-scale medical diagnostic and treatment equipment market, General Electric, Philips and Siemens three foreign companies led by an absolute monopoly. According to the Chinese market survey research center conducted a special survey in 2007, the domestic market of about 80% of CT, 90% of the ultrasound equipment, test equipment 85%, 90% of the MRI equipment, 90% of the ECG, 80% of the Monitor high, 90% of high-grade and 60% of the polygraph sleep plotter markets are dominated by multinational brands.
With the new primary care doctors offered to tilt, to broaden the population covered by rural cooperative medical care and reimbursement increase, multinational medical device companies invariably turned their attention to the rural grass-roots marketing, trying to rely on technology, marketing strengths, areas of low take-all high school, through acquisitions, partnerships and other shortcuts to enter the Chinese market is the modus operandi of foreign-funded enterprises.
Back in 2008, to cardiac pacemakers, coronary stents and other products known Medtronic shares of HK $ 1.726 billion invested in Shandong Weigao Group, and the latter 15% stake to become the second largest shareholder. Meanwhile, both sides announced the establishment of a joint venture company, the exclusive distributor in China, Medtronic and Weigao orthopedic orthopedic products company. Healthcare giant General Electric also Xinhua Medical (600,587, stock it) and several domestic companies set up joint venture company, its policy is not inferior to the sensitivity of local enterprises. In the May 2009 launch of the \"Healthymagination\" strategy, General Electric announced that it will invest in the next six years $ 3 billion for the development of 100 kinds can increase the health coverage, improve quality and reduce costs of new products. Also, the medical health of John Dineen, President\\ s visit to China, the claim that most want to visit the county of Sichuan medical and health institutions.
The world-renowned medical imaging and information technology company Care-stream Health (Carestream Health, formerly Kodak\\ s medical imaging business, to $ 2.55 billion after the sale to Canada\\ s equity investment company Onex), as early as 2005, had the product structure of the strategic adjustment, gradually increasing in rural areas and communities to invest in the product market, the proportion of grass-roots level, and take the initiative to lower the price, as its imaging system, the $ 2 million from the previous reduced to 1 / 2 or 1 / 3. In the \"deep grass-roots\" strategy, driven by its low-end 2009 sales contribution to total sales has increased to 40%. Germany\\ s Siemens is also dedicated to community and rural health care market, such as CT scanners, ultrasound machines and other advantages of the \"affordable\" version.
Multinational companies to accelerate the market penetration of Chinese grass-roots, on the one hand the high-end medical equipment market growth, sluggish annual growth rate of about 10%, while the growth rate in the low-end medical equipment up to 30%. On the other hand, primary equipment is a big gap has also given them good reason, in China, medical resources are mainly concentrated in two cities, three major hospitals; 15% of medical institutions in the country\\ s existing equipment and facilities are of the last century products 70 years ago, 60% of the equipment before the mid-1980s of products in the Midwest and rural areas of this phenomenon is more serious. Ministry of Health Planning and Finance Division data show that China now more than 2,000 county hospitals an average gap of 30% of the equipment configuration, a large number of medical diagnostic equipment need to purchase or replacement. All levels of government commitment to put 850 billion yuan in medical reform cake, will also explicitly based medical tilt.
\"Development of medical devices suitable for China\" policy guidelines, in addition to product development and market demand for cost-effective to move closer to the grassroots level, the multinational companies also frequent tactics, sink channel, to create a public image of the first donation, by finance lease force to drive sales for its use in general practice is also to quickly reached the attention of this growing market.
Domestic enterprises: high-end advance
Strong top-down and penetration of different multinational companies, mostly concentrated within the primary market-funded enterprises, the State Food and Drug Administration (SFDA) statistics show that currently there are up to more than 6,000 medical device manufacturers, 118,000 enterprises . Prior to meddle in foreign disdain, these accounted for the vast majority of local small and medium sized medical device manufacturers, with the advantages of cost and divide up the channel in the low-end market. However, the disorder caused by excessive competition price war, coupled with the raw materials, labor costs, export exchange losses, the overall industry profit margins have been severely squeezed.
Although the construction of primary health care system to boost low-end equipment market demand, but read the policy direction of the foreign-funded enterprises have done its homework for the new cake division, top-down inertial advantage, once extended, the threat can not be underestimated. Domestic enterprises active in the main battlefield against the front, while also working to enter the high end. Diving medical (002,223, stock it) in 2010 set up a special laboratory, hoping to embark on extensive growth by the professional way, and can increase oxygen and other sub-areas of technical competence; industry exports ranked second Shenzhen Mindray also said that in the roots in primary market, will force the high-end, the main export-oriented market.
Jiang Feng Chinese Medical Association, pointed out that the relative pharmaceutical industry, medical equipment industry in the intersection of multiple disciplines, involving machinery manufacturing, IT and other technical level has a comparative advantage. China Healthcare Fund partner Chen Yun also believe in the pharmaceutical biotechnology industry, the sub-sectors with the smallest gap between the international advanced level, and return quickly. In addition, domestic investors are listed medical device company gave a positive response, venture enthusiastic, high price-earnings ratio, if used properly raised funds from high-end market segments of the breakthrough is not inconceivable. However, technology gap, the service, such as sales and marketing model are non-soft power gap between the day to make up for a moment.
In fact, deep price war to break through to high-end domestic enterprises, although in the face of strong enemy counterattack arrives move, but should be regarded as instinctive pursuit of highly profitable choice. In the basic health care market take advantage of the diving medical, and stent systems have been successfully break the monopoly of foreign music universal health care (300,003, stock it), although both at the medical device market with gross margin and net profit margin, there exists Tianrang other, the former 20% of their income from government tenders based health care market, but the net profit margin hovering below 20%, while the sub-field advantage in the general health of the music, the higher the market share obtained through the relative strength of pricing, gross margin as high as 80%, net profit margin of more than 50%.