The Zhitong Finance app learned that Guotai Junan released a research report saying that the localization rate of sports medicine has increased dramatically, and that national procurement is expected to accelerate the number of domestic companies admitted to hospital. The share of Chinese manufacturers in the national survey has increased dramatically. Market share is estimated based on the procurement demand of various brands and the most effective bid prices. Although imported brands such as Schleghui, Johnson & Johnson, and Ruishi still occupy the top three, domestic brand shares have risen to 49%. Among them, companies such as Tianxing Medical and Ruijian Mastin, which focus on the sports medicine segment, are leading in reporting. Listed orthopedic companies such as Zhongweigao Orthopedics (688161.SH), Dabo Medical (002901.SZ), and Chunli Medical (688236.SH) have also completed initial sports medicine Product line layout, obtained separately The market share of 2.4%/2.4%/1.6% is expected to use this national procurement to rapidly increase hospital coverage and lay the foundation for subsequent volume expansion.

Guotai Junan's main views are as follows:

Announcement No. 2 of the National Approaches to Intraocular Lenses and Sports Medicine was issued.Following the publication of Notice No. 1 on September 14, 2023, Notice No. 2 was issued on November 11, clarifying procurement requirements, the most effective quotation, specific rules, etc. The collection is scheduled to be publicly disclosed on-site on November 30. The procurement cycle is 2 years, and it is expected that implementation will begin in 2024H1 in all provinces one after another.

The selection rules are moderate, a guarantee line is set, and the allocation of agreed procurement volume is skewed towards low prices.

(1) Set a guaranteed recovery line: For groups with more than 2 participating companies, the price less than a certain ratio of the maximum price can be selected (60% for artificial lenses, 40% for sports medicine); for companies with 1 or 2 participating companies, the guarantee reduction requirement is even lower, and the price for intraocular crystals/sports medicine is less than 80%/70% of the maximum price to guarantee a certain winning bid.

(2) In terms of selection distribution, low-priced products can receive greater preference, while considering the competitive pattern of each product. ① The group of participating companies > 2 companies: if the participating companies > 5 are selected according to rule 1 (the decline is large), the purchasing volume is distributed on a 100% to 80% gradient according to the decline ranking (if there are 3-5 participating companies, the distribution is on a 100% to 50% gradient); 50% of the purchase volume is distributed according to rule 2 (less reduction); the remaining amount is distributed to the top 40% of the low-priced products or reported demand and the price of one in the rule is less than a certain maximum limit Ratio (60 for intraocular lenses %, 40% in the sports medicine category) companies. ② Group of less than 2 participating companies: the procurement volume is distributed from small to large according to the ratio of the price to the maximum price; the remaining volume is distributed to the lowest selected company with the highest price.

The localization rate of intraocular lenses is still low, and the results reported by Aibo Medical are relatively good.

The Alliance's procurement demand was 1.92 million films, of which single focus, double focus, triple focus, and extended depth of field accounted for 84%, 12%, 1%, and 3% respectively; based on a simple calculation of the average price of each group, the procurement scale was 4.95 billion yuan, of which single focus, double focus, triple focus, and extended depth of field accounted for 60%, 23%, 7%, and 10% respectively. The total number of domestic products is 579,000, with a localization rate of 30% based on demand. Among them, the localization rates for monofocal non-astigmatism, monofocal astigmatism, and bifocal non-astigmatism are 35%/18%/12%, respectively. There are no domestic products in the rest of the categories yet. Aibo Medical reported 28.3/0.82/25,800 films for monofocal non-astigmatism/monofocal astigmatism, and bifocal non-astigmatism, respectively, with a market share of 18%/15%/12%, respectively. Aibo Medical's “Full Vision” is the only domestically produced crystal that enters bifocal non-astigmatism, and has achieved good results. There is not much difference between Guocai's maximum effective application price and Beijing-Tianjin-Hebei 3+N's second-round renewal price. Combined with Aibo's average factory price for each product category in 2019, we expect that the highest effective application price is still some distance from the factory price.

Sports medicine: The localization rate has increased dramatically, and national procurement is expected to accelerate the number of domestic enterprises admitted to hospital.

Sports medicine is still in a period of rapid development in China. According to Insight Consulting's estimates, in 2022, Chinese and foreign brands in the Chinese sports medicine market accounted for more than 80% of the market share, with the top three domestic enterprises accounting for a total share of about 8%. The share of Chinese manufacturers in the national survey has increased dramatically. Market share is estimated based on the procurement demand of various brands and the most effective bid prices. Although imported brands such as Schleghui, Johnson & Johnson, and Ruishi still occupy the top three, domestic brand shares have risen to 49%. Among them, companies such as Tianxing Medical and Ruijian Mastin, which focus on the sports medicine segment, are leading in reporting. Listed orthopedic companies such as Zhongweigao Orthopedics (688161.SH), Dabo Medical (002901.SZ), and Chunli Medical (688236.SH) have also completed initial sports medicine Product line layout, obtained separately The market share of 2.4%/2.4%/1.6% is expected to use this national procurement to rapidly increase hospital coverage and lay the foundation for subsequent volume expansion.