Rehabilitation medical treatment covers a wide range of people, with a variety of treatment technologies to improve dysfunction and strong terminal demand. Rehabilitation medicine, preventive medicine, clinical medicine and health medicine are called "four medicine" by who, which has high medical, economic and social value. Rehabilitation medicine covers a wide range of people, such as the elderly, the disabled, patients with chronic diseases and postoperative patients. It can reduce the mortality and disability rate, save rehabilitation time and medical expenses, help patients improve their dysfunction and improve their quality of life. With the aging of the population, the improvement of rehabilitation awareness, capital entry, the enhancement of social payment capacity, and the continuous catalysis of policies, the number of rehabilitation medical diagnosis and treatment in China increased year by year from 2011 to 2020, and the compound annual growth rates of outpatient and emergency visits and discharge were 10.6% and 18.3% respectively. There is strong demand in the rehabilitation medical industry.

   according to KPMG's calculation, the total consumption of China's rehabilitation medical market in 2018 will be 58.3 billion yuan, with a year-on-year increase of 24%. It is expected to reach 103.2 billion yuan in 2021 and exceed 200 billion yuan in 2025.

  policies and needs drive a new round of construction wave of rehabilitation medicine, and rehabilitation medical devices are expected to benefit first. Rehabilitation medical services mainly reflect the value of technical labor, which is in line with the direction of "two reductions and one increase" under the new medical reform. The initial investment cost is low and the profit model is good. With the increase of the price of rehabilitation medical services and the expansion of medical insurance coverage in some areas, it has gradually attracted the attention of public hospitals and private capital, and the construction of hospital rehabilitation medicine department has become more active.

  in June 2021, the National Health Commission and other eight ministries and commissions jointly issued the "opinions on accelerating the development of rehabilitation medical work", which clearly proposed to increase the supply of rehabilitation medical services, improve and improve the rehabilitation medical service system, improve the capacity of rehabilitation medical services and increase support and guarantee. We believe that it will drive the rehabilitation medical industry into the second construction wave, Rehabilitation medical devices are expected to benefit first. We estimate that the total investment in rehabilitation medical devices brought by policy filling and new hospitals during the 14th Five Year Plan period will reach 34.3 billion yuan.

  demand expansion and technological innovation push up the ceiling of the industry, and R & D iterations and channel capabilities win. With the sinking and penetration of rehabilitation resources, the reform and improvement of medical insurance payment system and the promotion of advanced concepts such as early intervention and clinical rehabilitation integration, the coverage and accessibility of rehabilitation medicine will continue to increase and promote the continuous expansion of industry space. By reviewing the development process of overseas rehabilitation medical industry and the competitive strategy of leading manufacturers, we believe that the reform of medical insurance system is the core driving force to promote the expansion of the industry. The rehabilitation equipment market is highly competitive and scattered, and leading manufacturers achieve high growth by virtue of large-scale and high-end strategy. The rehabilitation medical device industry will closely combine the clinical needs, improve the clinical performance of the equipment by virtue of technological innovation and product iteration, enrich treatment technologies and means, improve the level of rehabilitation medical treatment, and truly move towards high-end and internationalization. Therefore, we believe that in the later stage of the construction wave of hospital rehabilitation medicine department, manufacturers with strong R & D iteration and channel service ability are expected to rise rapidly in the industry competition with large-scale and high-end advantages.

  investment suggestion: the rehabilitation medical device industry has ushered in a period of vigorous development, focusing on Xiangyu medical and Weisi medical.

  the construction of rehabilitation medicine in China is in the ascendant. With policy encouragement and strong demand, it is expected to enter the second construction wave, and the rehabilitation medical device industry is expected to take the lead in benefiting from the high prosperity of the industry. In the long run, with the sinking of rehabilitation resources, the improvement of medical insurance payment system and technological innovation, the accessibility and clinical value of rehabilitation medicine are continuously enhanced. Leading manufacturers are expected to achieve leapfrog development by virtue of R & D iterations and channel service capabilities. Key recommendations: Xiangyu medical and Weisi medical, and it is recommended to pay attention to: Pumen technology, Chengyitong, etc.

  risk warning: the construction of rehabilitation department is slowing down; The progress of rehabilitation projects being included in medical insurance is lower than expected; Risk of R & D failure; Risk of centralized purchase of rehabilitation equipment / equipment; Safety accident risk.