New Medical Demand Worth Hundreds of Billions! Financial Discount Loans to Flood into Medical Equipment Upgrading and Transformation according to the National Health Commission

  • 2022-09-23

The executive meeting of the State Council held on September 7 decided to offer staged financial discount loans for equipment upgrading and transformation in some areas and increase credit support for social services, so as to promote the main driving role of consumption. By September 13, the executive meeting of the State Council determined special refinancing and financial discount support for equipment upgrading and transformation in some areas, to expand market demand and bolster the momentum of development.

In response to the decision of the executive meeting of the State Council, the National Health Commission has recently issued a notice of the plan to upgrade and transform medical equipment using financial discount loans.

From what has been learned, the Department of Planning and Information and other related departments of the National Health Commission are discussing the detailed policy rules and will issue a supporting policy soon to further clarify the use of financial discount loans to upgrade and transform medical equipment in hospitals.

Specifically, related financial discount loans will be fully available to all public and private medical institutions in principle, with a loan amount of not less than RMB 20 million for each hospital. The loans can be used for purchasing medical equipment for diagnosis and treatment, clinical examinations, serious illnesses, rehabilitation, scientific research transformation, etc.

“Provinces are expected to complete the list of loan projects before the National Day and sign loan agreements and pay first loans for equipment purchase by the end of the year,” revealed by a researcher knowing information about the policy. According to what has been reported in Zhejiang, Jiangsu, and Anhui, procurement demand for equipment worth about RMB 18 billion has been reported. By analogy, demand worth hundreds of billions in China will emerge around medical equipment upgrading and transformation.

According to market practitioners, this introduction of financial discount loans to support medical equipment upgrading and transformation is also a key part of the new medical infrastructure in China.

The related plan for the 14th Five-Year Plan period announced earlier shows that the focus will be on improving public health prevention, control, and treatment capabilities, enhancing the high-quality development level of public hospitals, promoting the expansion of quality medical resources to rural areas, and deepening the results of the medical and health service system reform. Therefore, the new medical infrastructure has become the focus of the medical and health service system during the 14th Five-Year Plan.

The wave of new medical infrastructure has brought significant performance growth to domestic medical equipment manufacturers. For example, medical device leader Mindray, automated pharmacy leader General Healthy, purification engineering leader Huakang Medical, and domestic ultrasonic endoscope leader SinoScape have all benefited from the related policy.

Take, Mindray, the absolute medical device leader in China, as an example. The company has expressed in the latest communication that the period from 2022 to 2024 will see the completion of a large number of new hospitals, and 2025 will begin to see a drop in the infrastructure quantity. Therefore, the new medical infrastructure will bring considerable growth to Mindray before 2024.

“The new medical infrastructure will drive a boom in device and equipment demand, and breaking through the bottleneck of core technologies and import substitution will contribute to the sales growth of domestic high-end medical equipment,” also expressed by Founder Securities in a research report.