Medical device industry policies continue, what are the good things to come?

With the spring breeze of favorable policy continues, the medical device sector has seen a more obvious rebound trend. From the news: "for hospitals and other equipment acquisition and renewal and renovation of new loans, the implementation of phased encouragement policy, the central financial subsidies 2.5 percentage points, a period of 2 years, apply for interest subsidies as of December 31 this year." This means that the hospital capital pressure eased, then medical equipment and pharmaceutical companies will be faster payback, pharmaceutical companies also have more funds to equip new equipment and drugs, which belongs to is a direct benefit to the pharmaceutical and suppliers.

In recent years, under the promotion of China's policies related to encouraging the development of the pharmaceutical industry, some foreign companies have actively invested in the pharmaceutical manufacturing industry, and related production and R&D projects have landed. Foreign pharmaceutical companies have accelerated their localization strategy, shifting from R&D to manufacturing and even supply chain to localization, promoting the optimization and upgrading of the pharmaceutical industry chain in China. They are represented by many international medical device giants that localize high-end devices, such as Siemens, Boston Scientific, etc.

The Health and Welfare Commission proposed that, according to the size of the local population, with adequate beds for treatment, but also for the ICU (intensive care unit) to strengthen the construction, and requires ICU beds to reach 10% of the total number of beds.

From the situation in these 2 years, ICU can greatly improve the survival rate of critically ill patients and buy time and opportunity for further treatment for critically ill patients. At present, the construction of ICU in China's hospitals at all levels generally suffers from a lack of beds and insufficient medical and nursing staffing.

Riding the bull to see the bear found that according to the current number of ICU beds in China, the number of beds available to treat critically ill new crown patients per million population in the intensive care medicine department ranges from 3.08 to 9.26 beds. Accelerating ICU construction may become the center of gravity of the epidemic disposal chain, determining the speed of adjustment of the rigidity of front-end prevention and control measures, which is expected to lay the foundation for the adjustment of front-end prevention and control of epidemic handling.

The total contracted amount of Shenzhen equipment renewal and renovation loans is 148 million yuan, and the total issued loan amount is 105 million yuan, involving new infrastructure, digital transformation of industry, health and other fields, with a total investment of 1.36 billion yuan. The proposed use of financial subsidized loans to update and renovate medical equipment. The central financial subsidized interest rate of 2.5%, the term of two years. The use of loans in the direction of clear recommendations for diagnosis and treatment, clinical testing, critical care, rehabilitation, scientific research and transformation and other related medical equipment acquisition.

All localities and departments should further increase the work of foreign investment in foreign trade services, on the basis of good anti-epidemic drugs and medical devices approval and supervision, speed up the review and approval of drugs and medical devices, strengthen the quality supervision of anti-epidemic products, and solidly promote the key foreign investment projects in medicine to land and put into operation.

Riding the bull to see the bear found that the discounted loans to stimulate the medical equipment gold window, policy support overlaid with domestic infrastructure will stimulate strong demand. For a long time most of China's high-end medical devices rely on imports, in recent years the discussion on the localization of medical device procurement has never stopped, some provinces and cities have issued pilot policies, in response to potential changes in China's market procurement trends, many foreign companies are also taking the initiative to consider the original imported products to localized production.

The direction of medical device companies is related to the heavy drop in valuation, in fact, the importance of the epidemic for more than 2 years for pharmaceuticals speaks for itself, yet medical device companies increase profits, the company's share price is constantly falling, which creates a logical misfire. Coupled with the 3 quarterly reports pharmaceutical companies have appeared substantial growth in performance, which is also a major reason for institutional funds to enter the field again.

For ordinary investors or not a flock to chase up, once high "blowing" experience is forgotten? Even if bullish should also be low intervention, the market still lacks confidence in pharmaceutical stocks, the temporary rebound is not the real reversal, after the national policy for medical device industry changes.