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China's Medical Device Market Breaks 900 Billion Yuan in 2022
2023-05-17
China's medical device market is expected to reach RMB 958.2 billion in 2022, with a compound growth rate of about 17.5% over the past seven years, making it the second largest market in the world besides the US. However, from the perspective of the drug-to-mechanical ratio, the current level of China's drug-to-mechanical ratio is only 2.9, which is still a certain gap from the global average drug-to-mechanical ratio of 1.4, indicating that there is more room for growth in China's medical device market in the future.
In the industry scale of stable high growth at the same time, the concentration of medical equipment industry has also been increasing. 2022, China's medical equipment above-scale production enterprises business revenue. In 2022, China's medical device manufacturers above the size of the business revenue accounted for more than 60% of the total industry. The number of listed medical device enterprises has exceeded 163, which has almost doubled compared to three years ago. The emergence of leading enterprises has accelerated the continuous breakthrough in product and technological innovation. In 2022, the State Drug Administration approved 55 innovative medical devices, an increase of 57% year-on-year, and more innovative high-tech medical devices continue to meet the growing health needs of the people, becoming a powerful driving force for the high-quality development of the industry.
According to statistics, medical devices will account for approximately 60% of the overall market size of medical devices in China in 2021, with the overall market size exceeding RMB 500 billion.
After the epidemic, the progress of public hospital renovation and expansion has been accelerated, and policy support will speed up the new construction and expansion of public hospitals at all levels. At the same time, the promotion of graded diagnosis and treatment will also further force grassroots hospitals to equip with corresponding medical resources and supporting facilities, and medical equipment companies, especially domestic manufacturers, will achieve a breakthrough in this market segment by virtue of their cost performance and policy support, driving changes in the competitive landscape.
Since the outbreak of the new epidemic, China's new medical infrastructure has entered a phase of rapid development to make up for the structural shortcomings of the supply side of medical resources. The number of new medical infrastructure projects such as the expansion of tertiary hospitals and the improvement of the quality of grassroots hospitals is significantly higher than in previous years.
In September 2022, the "National Health Commission to carry out financial subsidies for loans to upgrade medical equipment notice" officially introduced, is expected to bring more than 200 billion in financial support, effectively alleviating the financial pressure of governments at all levels and the financial pressure of medical institutions.
With the gradual rollout of volume purchasing, the mature business of medical device companies is facing growth bottlenecks. In addition, the valuation of a large number of companies has dropped significantly due to the impact of the capital winter. Under the influence of multiple factors, medical device companies will start to layout high potential tracks through M&A and license in in 2022. The investment scale has increased significantly, from 62 deals in 2013 to nearly 600 in 2022, and the investment scale has increased from RMB 350 million in 2013 to approximately RMB 26 billion in 2022, making it the core hot spot in the healthcare sector.
In 2022, a number of landmark M&A events took place in China's medical device sector, which can be divided into the following three main types in terms of both sides of the merger.
The first type is the M&A between two small and medium-sized medical devices. The first type of M&A is between two small and medium-sized medical device companies, where the product lines are complementary and the overall competitiveness and risk tolerance of the companies are enhanced.
The second type of M&A is between platform companies and vertical track leaders. M&A can help companies to complement their product pipeline and ensure that established companies have a dominant position in new technologies and emerging markets.
The final category is cross-border M&A. Digitalisation is becoming an increasingly important issue in the medical device industry and medical device companies are increasing their digital M&A efforts. The increasing financial strength of listed companies, platform-based medical device companies and professional medical M&A, the emergence of more high-quality target companies, combined with the continued loosening of national policies on corporate investment and financing as well as mergers and acquisitions, will help the medical device industry to achieve strong alliances within the industry and between industry and capital in both domestic and global markets, accelerating the development of China's medical device industry.
In the industry scale of stable high growth at the same time, the concentration of medical equipment industry has also been increasing. 2022, China's medical equipment above-scale production enterprises business revenue. In 2022, China's medical device manufacturers above the size of the business revenue accounted for more than 60% of the total industry. The number of listed medical device enterprises has exceeded 163, which has almost doubled compared to three years ago. The emergence of leading enterprises has accelerated the continuous breakthrough in product and technological innovation. In 2022, the State Drug Administration approved 55 innovative medical devices, an increase of 57% year-on-year, and more innovative high-tech medical devices continue to meet the growing health needs of the people, becoming a powerful driving force for the high-quality development of the industry.
According to statistics, medical devices will account for approximately 60% of the overall market size of medical devices in China in 2021, with the overall market size exceeding RMB 500 billion.
After the epidemic, the progress of public hospital renovation and expansion has been accelerated, and policy support will speed up the new construction and expansion of public hospitals at all levels. At the same time, the promotion of graded diagnosis and treatment will also further force grassroots hospitals to equip with corresponding medical resources and supporting facilities, and medical equipment companies, especially domestic manufacturers, will achieve a breakthrough in this market segment by virtue of their cost performance and policy support, driving changes in the competitive landscape.
Since the outbreak of the new epidemic, China's new medical infrastructure has entered a phase of rapid development to make up for the structural shortcomings of the supply side of medical resources. The number of new medical infrastructure projects such as the expansion of tertiary hospitals and the improvement of the quality of grassroots hospitals is significantly higher than in previous years.
In September 2022, the "National Health Commission to carry out financial subsidies for loans to upgrade medical equipment notice" officially introduced, is expected to bring more than 200 billion in financial support, effectively alleviating the financial pressure of governments at all levels and the financial pressure of medical institutions.
With the gradual rollout of volume purchasing, the mature business of medical device companies is facing growth bottlenecks. In addition, the valuation of a large number of companies has dropped significantly due to the impact of the capital winter. Under the influence of multiple factors, medical device companies will start to layout high potential tracks through M&A and license in in 2022. The investment scale has increased significantly, from 62 deals in 2013 to nearly 600 in 2022, and the investment scale has increased from RMB 350 million in 2013 to approximately RMB 26 billion in 2022, making it the core hot spot in the healthcare sector.
In 2022, a number of landmark M&A events took place in China's medical device sector, which can be divided into the following three main types in terms of both sides of the merger.
The first type is the M&A between two small and medium-sized medical devices. The first type of M&A is between two small and medium-sized medical device companies, where the product lines are complementary and the overall competitiveness and risk tolerance of the companies are enhanced.
The second type of M&A is between platform companies and vertical track leaders. M&A can help companies to complement their product pipeline and ensure that established companies have a dominant position in new technologies and emerging markets.
The final category is cross-border M&A. Digitalisation is becoming an increasingly important issue in the medical device industry and medical device companies are increasing their digital M&A efforts. The increasing financial strength of listed companies, platform-based medical device companies and professional medical M&A, the emergence of more high-quality target companies, combined with the continued loosening of national policies on corporate investment and financing as well as mergers and acquisitions, will help the medical device industry to achieve strong alliances within the industry and between industry and capital in both domestic and global markets, accelerating the development of China's medical device industry.
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