The development trend of medical device enterprises is merger and reorganization
The medical industry has achieved very rapid growth in the past 15 years. However, in the capital market, investment in the medical device industry is relatively small compared to other related industries such as pharmaceuticals and circulation. However, this also represents a lot of room for development of medical devices in the future.
Last year, China's entire pharmaceutical industry was about 2 trillion yuan in scale, and medical devices accounted for less than 15%. In other words, the scale of the pharmaceutical industry was about 7 times that of medical devices.
From the perspective of profit and growth space, comparing A-share listed medical device companies with Hong Kong listed medical device companies, we can see that the profit ratio of this industry is relatively high.
Looking at the market value, the market value ratio of China's medical device industry is about 7%, and that of the US is almost 21%. Therefore, our room for growth is considerable.
In terms of valuation, in more mature markets such as the United States, medical devices are relatively more respected, and the valuation is higher, which shows that everyone is still very optimistic about this industry.
We found that the big trend in the future is mergers and acquisitions, at least in the pharmaceutical and other fields.
In the Hong Kong market of China, three major mergers and acquisitions occurred 3-4 weeks ago: Fosun Pharma (600196) acquired an Indian pharmaceutical company, Shanghai Pharmaceuticals (601607) acquired an Australian health products company and a pharmaceutical company purchased by Germany. We can see that in terms of the manufacturing industry's integration with overseas, whether it is technological innovation or expansion of overseas markets, Chinese companies have already gone global and are making a global layout, including entering the US market and the European market. In the past, relatively large areas in the capital market, such as minimally invasive, are now slowly beginning to integrate. Chinese pharmaceutical companies may be connected in this area through mergers and acquisitions. I believe that more and more Chinese companies will do this. a little.
Looking back on the past and looking forward to the future, it is expected that mergers, especially M&A (corporate mergers and acquisitions, including mergers and acquisitions with two meanings and two methods) will play an important role in the capital market. We have counted the A-share listed companies and compared the cash flow of the past 3 years and the current through financial accounting. We believe that half of the companies in the A-share market have the ability to do mergers and acquisitions. This is a relatively large trend in the future.
