The Zhitong Finance App learned that Guojin Securities released a research report saying that on March 13, the State Council released the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In”. The bank believes that the release of the State Council document will benefit the future development of the medical equipment industry, the enthusiasm of enterprises to innovate and develop will be stimulated, medical equipment market capacity and high-end product penetration rate may be increased, and leading domestic medical equipment companies are expected to gain more market share by reducing manufacturing costs and product technology advantages. It is recommended to focus on segments such as surgical robots, endoscopes, ultrasound, and ICU equipment.

Key companies: Mindray Healthcare (300760.SZ), Lianying Healthcare (688271.SH), Minimally Invasive Robotics (02252), Aohua Endoscopy (688212.SH), Shanwaishan (688410.SH), etc.

Incident: On March 13, 2024, the State Council issued the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In”. The document suggests that promoting large-scale equipment renewal and consumer goods trade-in is an important measure to accelerate the construction of a new development pattern and promote high-quality development. It will strongly promote investment and consumption, and will benefit both the present and the long term. The text highlights the requirements for health-related equipment renewal actions.

Guojin Securities reviews are as follows:

By setting a target to increase the scale of investment in medical equipment, the hospital's willingness to purchase and replace medical equipment will increase. The document clearly states that by 2027, the scale of domestic equipment investment in industry, agriculture, construction, transportation, education, cultural tourism, medical care, etc. will increase by more than 25% compared to 2023, and the compound annual growth rate will reach at least 5.74%. Financial support for equipment procurement in public hospitals is expected to increase in the future, and demand for medical equipment tenders is expected to gradually resume.

Promoting equipment upgrades in medical and health institutions, demand for high-end innovative medical equipment is expected to be released. The document proposes to promote the iterative upgrading of equipment and information technology facilities in medical and health institutions, and encourage medical institutions that are in a position to do so to speed up the upgrading of medical equipment such as medical imaging, radiotherapy, telemedicine, and surgical robots. It is expected that ICU, imaging, surgery and other departments will further increase their innovative high-end equipment capacity, and medical insurance coverage and payment for equipment products are expected to be further improved, and the profits and R&D capabilities of leading domestic companies are expected to improve as a result.

The renovation and construction of the hospital is expected to boost the recovery of orders from engineering companies. The document proposes to promote the renovation and upgrading of medical institutions' wards and make up for shortcomings in the ward environment and facilities. According to the “2022 Statistical Bulletin on the Development of Health Services in China” issued by the National Health and Health Commission, at the end of 2022, the total number of medical and health institutions nationwide was 103,2918, an increase of 1983 over the previous year. Among them: 36,976 hospitals, 979,768 primary medical and health institutions, and 12,436 specialized public health institutions. Compared with the previous year, the number of hospitals increased by 406, and the number of primary health care institutions increased by 1978. The increase in domestic medical institutions and stock updates are expected to drive engineering companies and hospital equipment companies to pick up orders.

Risk warning: Product health insurance coverage falls short of expectations; risk of falling prices of equipment products; risk of rising product costs; risk of sales and promotion of new products falling short of expectations; new product development progress falling short of expected risk.