Health & Beauty

From blood oximeter to oxygen generator and respirator, what it points to is the growing demand of consumers for health and the resulting huge market of household medical devices.

Household medical devices refer to medical devices for the purpose of detection, treatment, rehabilitation and health care in the family scene. Compared with medical medical devices, they are simple, easy to use and small in size. The main products include the oxygen generator, household ventilator, blood pressure meter, blood glucose meter, wheelchair, and so on.

According to the observation of Huacheng's import and export data, the size of China's domestic medical device market has increased from 53.33 billion yuan in 2017 to 102.53 billion yuan in 2021, with an annual compound growth rate of 14.16% in 2017-2021. With the growth of the population with chronic diseases and the aging population, as well as the improvement of residents' consumption and living standards, the domestic medical device market will further sink in the future, reach more consumers, and bring sustained growth momentum to the market. It is expected that the domestic medical device market will reach 178.36 billion yuan in 2026, and the CAGR will be 11.14% in 2021-2026.

Some analysts believe that with the further optimization of epidemic prevention and control, "everyone is the first person responsible for their own health", and personal health protection will be the main goal for a long time to come, which will obviously bring a new round of growth momentum for household medical devices.

How long can the excitement of the oximeter last?

Recently, "silent hypoxia" has been repeatedly mentioned by the media, which means that the elderly may be slow to respond to hypoxia after being infected with COVID-19, and there is a risk of delayed treatment. At the moment when the infection peak is coming in all parts of the country, we have indeed seen the lethality of COVID-19 to the elderly. Many people are eager to monitor the blood oxygen level in real time. The portable blood oxygen meter at home has become another popular category after antigen and ibuprofen.

Due to the low technical threshold of blood oximeter, there are many domestic manufacturers. According to the public information of the Food and Drug Administration, a total of 77 batch numbers of blood oximeters have been issued in China, including 24 finger clip types, including the figures of listed companies such as Kangtai Medical, Yuyue Medical and Lepu Medical.

The unit price is not high, and there are many friends. In fact, the blood oximeter has not been so important in the business of various companies for a long time. Kangtai Medical sold 1.6875 million blood oximeters in 2019, accounting for only 28% of the revenue, and the gross profit margin was only 36%, even lower than the company's overall gross profit, Huacheng Import and Export Data Observation Report.

Unexpectedly, the sudden outbreak of COVID-19 in 2020 ignited the oximeter market. Kangtai Medical sold 15.6 million units that year, eight times more than 2019, of which 78% were exported. Moreover, the gross profit rate is as high as 56.5%, realizing a double harvest of income and profit. Other manufacturers also experienced blowout in revenue, and the sales of related products of Chaosi Electronics, another giant in the field of blood oximeter, Hongri Pharmaceutical (300026), also reached the level of ten million units.

However, the explosive demand came and went quickly. According to Huacheng Import and Export Data Observation, its sales of blood oxygen meters fell rapidly to 10 million units in 2021, with a year-on-year decrease of 47.75% in revenue. The specific sales volume is not listed in the 2022 semi-annual report, but the revenue figure of blood oxygen products is 154 million yuan. If we calculate the revenue of 15.6 million units in 2020 to reach 880 million yuan, the sales volume in the first half of this year should be about 2.75 million units, which is a sharp decline compared with the previous two years, which should be the main reason for the decrease of the overall net profit of the company by nearly 40%. The situation of Hongri Pharmaceutical is similar. Although most of the other listed companies have not separately listed the business of blood oxygen products, it is estimated that they have taken a roller coaster ride.

Therefore, there will certainly be explosive demand in China, which has never experienced the impact of large-scale epidemic, which will also be reflected in the business performance of the factory. However, the consumption cycle of household equipment products is very long, and I'm afraid it will turn down after a short-term boost. This is also the main reason why many companies are generally cautious when answering the question of whether investors will expand their capacity. After all, in 2020, many companies will blindly mount masks and forehead temperature gun projects, and the result will be crying.

Antigens are no longer in demand, and it is not difficult to buy ibuprofen. How long can the excitement of the oximeter last?

The penetration space of household medical equipment is broad

Of course, demand will always slow down, but we don't have to focus on this temporary gain and loss. After experiencing the face to face impact of COVID-19, the low price blood oximeter is expected to become a regular spare part for many people, and the market capacity of this category will also operate at a higher base.

In addition, with the substantive change of policy, it is more necessary to monitor the health situation at any time by configuring household medical equipment. Therefore, in the author's opinion, the significance of this wave of sales of blood oximeter is that it has completed a profound market education of household medical equipment. At present, domestic consumption in this area is very limited, and is concentrated on blood pressure meters and other traditional products. In developed countries such as Europe, the United States and Japan, the penetration rate of various types of home medical equipment is much higher than that of China, and the oximeter can reach 60% - 70%, so it seems that there is not much room for improvement.

In general, for the market prospect of the oximeter itself, whether listed companies or investors, we should not be confused by the excitement of the moment.

However, although the heat rate of the blood oximeter may soon ebb, the expansion of the entire field of household medical equipment may be just beginning.

According to the "2021 White Paper on the Trends of China's Internet Home Health Devices" released by Tmall Health, the online home medical device market has grown steadily, and consumer demand is iterating towards a more proactive "monitoring and prevention".

The person in charge of Tmall Health said, "Before 2019, the scale of online devices was mainly based on the domestic treatment and detection devices derived from the hospital line. Compared with the last two years, we found that the number of health protection products, excluding the epidemic related products, was still nearly doubled year on year."

"Monitoring and prevention" has gradually become the primary demand of consumers' health consumption. At the same time, family health needs are further refined, and diversified life needs the adaptation of various products, so as to achieve "self healing" and "precise care".

Many kinds of disease detection scenarios have gradually shifted from hospital physical examination to daily home self-check, and the home detection market has strong vitality. Before this year, blood glucose and blood pressure testing were the most concerned by consumers.

It can be seen that the recent "out of stock+price increase" of blood oximeter is not only driven by the detection of COVID-19 infection, but also the further expansion of consumer health consumption demand. The habit of self-monitoring and protection developed in the epidemic situation has gradually promoted household medical devices to become indispensable "equipment"; Consumption habits are still being developed.

According to the import and export data, from the perspective of the global market, the market scale ratio of normal medical devices and medicine is about 0.5:1, and that of developed countries such as Europe, America and Japan has risen to about 1:1, that is, the scale of medical devices and medicine is similar and balanced. In China, the proportion of per capita consumption of drugs and medical devices is only 1:0.35.

According to import and export data, as early as 2000, Japan began to implement the medical care insurance system. Medical devices (including household appliances) can be rented, and the proportion of insurance reimbursement is up to 90%, which has greatly promoted the use rate and consumption volume of devices. In addition, household medical devices and drugs are of no importance and should complement each other in life. Without drugs, the devices cannot fully play their value, while without devices, the drugs cannot meet the diverse health needs. Therefore, in many countries in Europe and the United States, household medical devices and drugs are equally important, and various provisions policies have been issued.

Therefore, compared with foreign markets, the penetration rate of domestic medical devices continues to increase. In addition to learning from the leading advantages of the technology and commercialization of Japan's blood oximeter, the improvement of policy support will also become a key determinant.

It is worth noting that the early domestic medical equipment market has been monopolized by foreign brands. In recent years, domestic brands have gradually risen. In addition to professional medical equipment enterprises such as Yuyue Medical, Sannuo Biological and Jiu'an Medical, there are also many cross-border players from the field of home appliances. According to incomplete statistics, on the track of cross-border medical field, there have been gathered including Midea, Gree, Hisense TCL and many other head appliance enterprises.

Analysts believe that household medical device products will increasingly become the rigid demand of people, which is the inevitable trend of the national health development. At present, this speed is accelerating.