According to the Zhitong Finance APP, Western Securities has released a research report stating that the Chinese blood dialysis medical device market is experiencing steady growth, with a CAGR of 5.67% from 2019 to 2023, and an expected CAGR of 21.52% from 2023 to 2027. On the demand side, the number of ESRD patients is rapidly increasing, leading to steady growth in dialysis demand and continuous expansion of the dialysis market size; residents' medical payment capabilities are continuously improving, and the gradual coverage of the medical insurance system is promoting the penetration rate of dialysis treatment. Compared to global leaders like Fresenius, China's blood dialysis companies currently exhibit characteristics such as a low proportion of overseas revenue and a low proportion of service revenue. The blood dialysis industry in China is showing characteristics such as accelerated domestic substitution, recovery of bidding processes, and gradual release of overseas potential.
<h2>The main viewpoints of Western Securities are as follows:</h2>
Strong supply and demand jointly promote stable growth in the blood purification industry
The Chinese blood dialysis medical device market is experiencing steady growth, with a CAGR of 5.67% from 2019 to 2023, and an expected CAGR of 21.52% from 2023 to 2027. Among them, the CAGR for blood dialysis machines/blood dialysis devices/blood dialysis tubing from 2019 to 2023 is 1.56%/5.38%/8.97%, respectively, and the expected CAGR from 2023 to 2027 is 22.23%/20.83%/28.94%.
The Chinese peritoneal dialysis solution market is also maintaining steady growth, with an expected CAGR of 16.0% from 2022 to 2026
Overall, the dialysis market size continues to expand: 1) On the demand side: The number of ESRD patients is rapidly increasing, leading to steady growth in dialysis demand and continuous expansion of the dialysis market size; residents' medical payment capabilities are continuously improving, and the gradual coverage of the medical insurance system is promoting the penetration rate of dialysis treatment. According to Frost &amp; Sullivan data, from 2018 to 2023, the number of ESRD patients receiving blood/peritoneal dialysis in China increased from 579,000/95,000 to 917,000/153,000, showing a stable growth trend in the demand side of the dialysis industry. 2) On the supply side: The number of companies in the blood purification consumables industry is continuously increasing, with domestic manufacturers in a leading position; industry policies are supporting the development of the blood purification industry, and volume-based procurement is further enhancing market concentration.
Lessons from others: Referencing Fresenius, optimistic about the development of services and product exports in China
Fresenius Medical's revenue contribution from the U.S. is about 70%, with a global layout of production bases and dialysis centers. Currently, Chinese blood dialysis manufacturers are still in the stage of accelerating overseas market layout, with the domestic market still contributing the majority of revenue. Shanwaishan is expanding its overseas and international sales scope through the export of blood dialysis machines and self-produced consumables. Referencing the situation of global leader Fresenius Medical, we believe that as the recognition of domestic manufacturers' blood purification equipment and consumables continues to improve, there is still significant potential in overseas markets. Fresenius Medical's service revenue is significantly higher than product revenue, with a dialysis network spread across the globe, and some domestic manufacturers are laying out downstream blood dialysis medical services to create a full industry chain business for blood dialysis.
Investment advice: Focus on overseas expansion, product matrix improvement, and major product directions
For the domestic hemodialysis industry, focus on three investment lines: 1) Companies with a rising trend in overseas expansion and high overseas potential: Shanwai Shan (688410.SH), BIOLIGHT (300246.SZ), Weigao Blood Purification (603014.SH), Sanxin Medtec (300453.SZ), Tianyi Medical (301097.SZ). 2) Companies with continuously improving product matrices: Weigao Blood Purification, Shanwai Shan. 3) Companies with strong single product competitiveness: Weigao Blood Purification, Shanwai Shan, Jianfan Biotechnology (300529.SZ), Sanxin Medtec, Tianyi Medical.
Risk Warning
Risks of product development not meeting expectations; risks of the &#34;volume-based procurement&#34; policy not achieving expected effects; risks of intensified industry competition affecting sales

300453

300246

Western Securities released a research report indicating that the market for blood dialysis medical devices in China is steadily growing, with a CAGR of 5.67% from 2019 to 2023, and is expected to reach 21.52% from 2023 to 2027. With the increasing number of ESRD patients and the improvement in residents' medical payment capabilities, the demand for dialysis continues to grow. The acceleration of domestic substitution, the recovery of bidding, and the release of overseas potential are characteristics of the industry. The market size for blood dialysis machines, devices, and tubing is expected to grow significantly in the coming years

Zhitong

Sanxin Medtec

BIOLIGHT

Fresenius Medical Care

Western Securities: The time for domestic substitution of blood dialysis is right; optimistic about major products, diversification, and overseas expansion