Medical devices is our long-term focus, and also the key investment direction in the future. Since it is the key direction, we must be clear about the characteristics of this sub industry, and have a clear idea of it, so that we can not panic in the process of investment, deal with it freely, and get good investment returns.
The first characteristic of the device industry is: long cycle
In the whole field of medical devices, the performance of devices improves continuously over time, showing a spiral rise. In other words, companies often benefit from the accumulation of time and technology. No instrument is produced suddenly. It has developed to today’s appearance after a long period of accumulation and improvement. Moreover, the use cycle of the instrument is relatively long. Unlike drug consumption, there will be no instrument. The instrument is reused. During this period, the personnel of the manufacturer will trade and communicate with doctors for a long time, and even the use of some instruments is completed by the auxiliary doctors of the manufacturer’s family Yes, it makes doctors and equipment manufacturers form a cooperative relationship.
The second feature is that the instrument is more viscous and will not be easily replaced
Once the downstream hospitals decide to use the products of a certain company, they are in the consideration of the stability and reliability of the equipment, especially for the consideration of the use habits. Generally, they will not easily replace the new brand. After replacing the new brand, the doctors will have to go through a long time to learn how to use the new equipment, which will increase the time cost of the doctors, so the equipment will not be used Easily replaced. When we go to the hospital, we often see that some instruments, such as monitors, ventilators, defibrillators, operating beds, etc., have been the same brand for almost many years, which shows to a certain extent that the industry of medical devices, due to the characteristics of medical instruments and the stickiness of the hospital, often has a long service life and is not limited by seasons and other time, which is very in line with the stock selection of value investment Conditions.
The third characteristic is the high trade barriers
A medical device often needs a lot of technology and parts to complete. For example, after the outbreak of “new crown epidemic” this year, the global demand for “invasive ventilators” exploded. But why can’t manufacturers meet the market demand? This is because a medical ventilator needs many skilled engineers to assemble, and thousands of parts need to be collected from many places around the world. Therefore, the medical device industry is a multi-faceted collaborative industry. With the launch of new products and the use of hospitals, manufacturers continue to upgrade and improve the products through patient feedback. The longer the time, the more stable and advanced the performance of the products, and the later ones are often difficult to surpass. Some people in the industry joked that once a set of medical equipment successfully enters the hospital, with the passage of time and the improvement of technology, the manufacturer will “lie down and make money” to a certain extent.
It is precisely because of such characteristics of medical devices that naturally we focus on. The better the place to make money, the more we should focus on investing in. Investment itself is to find industries and companies that create long-term value, and then invest in such companies. Naturally, medical devices are such fields, which will become our focus industry. I believe that in the future of China’s medical device industry, there will be a super large market value company born, we are quietly waiting for the arrival of this day.
Editor in charge: CC