In the context of the “Healthy China†strategy, which has been included in the national “13th Five-Year Plan†and the market is good, listed companies and PE/VC from the medical and health industry have said that there is no capital winter in the medical health industry. The core investment and financing and mergers and acquisitions will continue to heat up in the three major markets of medicine, medical equipment and medical (health) services.
Under the background of the “Healthy China†strategy, which has been included in the national “Thirteenth Five-Year Planâ€, the weight of the medical health sector has been further enhanced in the hands of various capitals, and even become a “safe haven†for capital during economic transition. On March 24th, the “Fifth Summit of Medical Device and Service Industry Investment and M&A CEO†held in 2016, listed companies and PE/VC from the medical and health industry all said that there is no capital winter in the medical health industry. The investment, financing and M&A booms centered on the three major markets of medicine, medical equipment and medical (health) services will continue to heat up. The reporter learned from the summit that in the M&A activities in the field of medical devices and health services, the degree of innovation and technical content are the two major indicators of the capital “draftâ€.
Medical equipment and health services become new hotspots
According to the statistics of the Shanghai Stock Exchange, in 2015, the number of M&A cases of listed companies in the A-share bio-pharmaceutical industry totaled 271, an increase of nearly 40%. In 2016, the medical industry mergers and acquisitions continued to surge. As of March 24, the number of M&A cases of listed companies in the A-share pharmaceutical industry had reached 48, an increase of 26% over the same period last year. From the analysis of the industry in which the underlying assets are located, pharmaceutical, medical device and medical (health) services have become the three major markets for the medical and health industry. Under the huge base of pharmaceutical companies, Chinese medicine, western medicine, bio-pharmaceuticals and other sub-divisions account for almost half of the total number of mergers and acquisitions, while medical equipment and health services are the new hotspot of capital nuggets.
Why is the climax of medical and health industry mergers and acquisitions? National policy drive undoubtedly sent Dongfeng to industrial investment. Zhuang Ning, Director of the Planning Department of the Planning and Information Division of the National Health Planning Commission, attended the "CEO Summit of the Investment and M&A of Medical Devices and Services Industry". He pointed out that during the two sessions of the National People's Congress this year, the General Office of the State Council issued the "Guiding Opinions on Promoting the Development of the Pharmaceutical Industry". Among them, among the 12 major tasks announced, seven sub-tasks refer to medical health. At the same time, among the 100 high-tech projects proposed in the National 13th Five-Year Plan, there are four categories related to medical health. "The medical health industry has gradually become a part of the national strategy, and it is the key development direction in the future." Zhuang Ning said.
In this context, the health care industry is highly motivated by mergers and acquisitions. In addition to the mainstream pharmaceutical market, mergers and acquisitions in the field of medical devices and health services have increased rapidly. In the view of Liu Daozhi, the founding and managing partner of Shanlan Capital, with the advent of the society and the expansion of the chronic patient population, the demand for medical (health) services will continue to grow, and the medical device market will generally maintain rapid growth. It is expected that by 2022, The scale of China's medical device market is expected to reach 7 billion US dollars, and the industry growth rate will maintain double-digit growth in the next few years.
Specific to the investment trend in the field of medical devices, Liu Daozhi said: "Innovation and domestic products to replace imports are the entry point for medical care. The entrance to investment must also be innovation and replacement. From the perspective of specific products, high-value consumables, diagnostic reagents, Medical robots (55.120, 0.24, 0.44%) and mobile medical care are areas in which Shanlan Capital has long been optimistic and concerned."
In the context of policy-driven and market-oriented, Lepu Medical (35.100, -0.38, -1.07%), Mindray Group and AstraZeneca have been actively preparing for the 2016 medical health market. At the summit, Pu Zhongjie, Chairman of Lepu Medical, said: “We will focus on the medical service market and become a major cardiovascular industry chain.†In its view, the demand for products and services in the primary medical market, which is mainly based on grassroots hospitals in the future. It will be more vigorous and is a key area of ​​industrial layout. This "tactical thinking" has also been recognized by the capital side. Ouyang Xiangyu, the managing director of Junlian Capital, said that mergers and acquisitions around the industrial chain are conducive to the synergy between enterprises.
It is worth mentioning that when it comes to the valuation bubble that may be faced in mergers and acquisitions, capital capital has also “suggested†to share investment experience. Wang Haijun, managing partner of Gao Tejia Investment Group, said bluntly: “The valuation bubble is only for companies that have no core competitiveness. For companies with core competitiveness, the current high valuation may mean high returns in the future.†Wang Haijun also Indirectly emphasizes its emphasis on the core competitiveness of the target company. Chen Penghui, a partner of Sequoia Capital China Fund, revealed how to make the merger “de-foamingâ€. "In terms of medical device mergers and acquisitions, it depends mainly on the size of the market in which it is located. The total market capacity is a very important consideration for our valuation of the medical machinery industry." Chen Penghui said.
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