The market prospect of cochlear implant is broad, and the permeability is still relatively low at present.
Cochlear implant converts sound into electrical signals through speech processors and stimulates the auditory nerve by implanting the electrode system in the body to restore the auditory function of patients with hearing impairment. According to the second national sample survey of the disabled, the number of people with hearing impairment in China has reached 27.8 million, of which 7.4 million are suitable for cochlear implants, but the proportion of cochlear implants in China is very low. Only 40, 000 patients in mainland China have been treated with cochlear implants. In China, the prevalence rate of congenital deafness is about 1 ‰-3 ‰. Assuming that the number of newborns is 15 million every year, there is a great demand for 1.5-45000 new congenital deafness patients in our country every year.
Policy encouragement, some provinces and cities into health insurance, the market is expected to further expand
The cost of cochlear implant includes cochlear fee, operation cost and late maintenance cost, and the overall treatment cost is expensive, which is the main reason to limit the expansion of cochlear implant market. In 2018, China launched the "13th five-year Plan" cochlear implant rescue project, which provides free cochlear implant for hearing impaired children and subsidizes the cost of operation and rehabilitation training, which greatly reduces the cost of cochlear implant. In addition, Liaoning, Jilin, Henan and Anhui provinces have included cochlear implants in the scope of medical insurance reimbursement, and the market for cochlear implants is expected to be further expanded with the help of policies and medical insurance.
There are few competitors and the price of domestic products is dominant, so it is expected to achieve import substitution.
At present, the global cochlear implant manufacturers are mainly Cochlear of Australia, Advanced Bionics of the United States and MED-EL of Austria, which occupy 55%, 20% and 20% of the global market share respectively. China has been heavily dependent on imports for a long time. In recent years, domestic cochlear implant has made great progress. At present, Shanghai Lishengte, Shenyang Hongdingkang and Hangzhou Nuoerkang have obtained the national approved cochlear implant production certificate. Compared with imported cochlear implant, the price of domestic cochlear implant is more affordable, domestic cochlear implant is 6-100000 RMB, while imported cochlear implant is more than 150-300,000 RMB. Domestic cochlear implant is expected to occupy the market with low price and realize import substitution.
A number of patents have been declared, and the new products have improved significantly compared with the first generation products.
Lishengte Company has declared a number of national patents, and the new generation of cochlear implant can support a variety of stimulation modes and better protect the fine structure of the cochlea than the first generation of cochlear implant. at the same time, domestic cochlear implants are more suitable for Chinese tone language than foreign cochlear implants, and the company is expected to break the monopoly of international manufacturers in the field of cochlear implants. The approved product is applicable to postlingual deafness patients with severe or extremely severe sensorineural deafness in both ears over the age of 6 years old. in addition, the cochlear implant speech processor is under review.
Due to the large impairment loss of assets in 2019, we estimate that the net profit for 2018-2020 will be reduced from 381 million to 262 million, maintaining the "overweight" rating.
Risk tips: the company's new product promotion is not as expected, the pressure of product bidding and price reduction, the recovery of API production is not as expected, administrative penalties may affect future financing, the risk of imperfect internal control, etc.
