Investment Insights from the Differentiated Performance of Enterprises Under Orthopedic Implant Centralized Procurement Policies

The orthopedic medical device industry has undergone in-depth baptism from national centralized procurement. From an average price reduction of 82% in joint centralized procurement in 2021[1], to 84% in spinal implant centralized procurement in 2022[1], and then 74% in sports medicine centralized procurement in 2023[1], the industry as a whole faces price pressure. However, the 2024 renewal results for artificial joints show that prices only decreased by 6%, a relatively moderate reduction[1], indicating that centralized procurement policies are becoming more refined and rational.

Weihai Weigao and Sanyou Medical’s net profit margins returned to around 20% in 2024Q3[2], indicating that the industry is emerging from the most difficult period of the impact of centralized procurement. In 2024Q3, the revenues of 4 companies in the sector achieved year-on-year positive growth[2], marking the arrival of the industry inflection point.

• 2024 Challenges and Transformation:
  Chunli Medical’s 2024 revenue decreased by 33.32% and net profit decreased by 55.01%[1], mainly affected by the full-line winning of joint products but price reductions
• 2025 Recovery Signal:
  Q1 domestic channel inventory was cleared, overseas and new products achieved rapid growth, and performance growth rate rebounded[1]
• International Layout:
  Actively expand overseas markets, with Southeast Asia, Europe, and South America as the main target regions[3]

Current ratio 6.33, quick ratio 5.09, showing extremely strong short-term solvency. The stock price performed outstandingly in 2025, with an increase of 96.40% year-to-date, and a market capitalization of 9.11 billion yuan[0].

• Product Line Expansion:
  Expand from orthopedics to multiple categories such as neurosurgery and general surgery to reduce single policy risk
• Excellent Performance:
  2024 Q1-Q3 revenue continued to grow positively, at 9.17%, 49.85%, and 50.38% respectively[2]
• Scale Advantage:
  Market capitalization of 19.73 billion yuan, revenue scale reaching 666 million yuan, ranking first among the three leading enterprises[0]

ROE reached 16.99%, net profit margin 21.82%, with excellent operational efficiency. Conservative accounting policies show that the company focuses on long-term value[0].

• Stable Market Share:
  Maintained relatively stable operating performance under centralized procurement pressure
• Valuation Advantage:
  P/E ratio is only 19.09 times, significantly lower than peers[0]
• Strong Cash Flow:
  Free cash flow of 289 million yuan, showing excellent cash creation ability[0]

Focus on deepening technology in the joint field, and maintain competitive advantages through product innovation and quality maintenance.

• Centralized procurement rules continue to be improved, leaving space for innovation[1]
• The March 2025 “Government Work Report” clearly proposed to optimize the centralized procurement policy for drugs and consumables[1]
• The price reduction in renewal bids is moderate, and the competition pattern is concentrated on leading enterprises[1]

• Centralized procurement accelerates industry reshuffling, leading enterprises gain larger market shares
• Scale effect and R&D advantages are further highlighted
• Going overseas becomes an important growth pole, and overseas market progress is rapid[3]

Enterprise Type	Investment Risk	Return Potential	Suitable Investors	Key Monitoring Indicators
Chunli Medical	Medium-High	High	Growth Investors	Overseas Revenue Ratio, New Product Launch Progress
Dabo Medical	Medium	Medium-High	Steady Growth Investors	Multi-category Synergy Effect, ROE Trend
Aikang Medical	Low-Medium	Medium	Value Investors	Market Share, Gross Margin Stability

• Reason: Obvious scale advantage, category diversification to disperse risks, high performance certainty
• Allocation Weight: Ballast stone in a stable portfolio

• Reason: Large internationalization space, sufficient elasticity, obvious policy catalysis
• Allocation Weight: Seek industry recovery and overseas dividends

• Reason: Low valuation, stable cash flow, strong defensiveness
• Allocation Weight: Stabilizer of the portfolio

Focus on the implementation of orthopedic implant centralized procurement renewal results
Focus on tracking overseas market progress and the volume release of emerging products
The industry enters a normalized development stage, pay attention to M&A integration opportunities

Orthopedic implant centralized procurement policies force the industry to transform and upgrade, and the strategic choices of different enterprises reflect different judgments on the industry’s development prospects. Chunli Medical’s internationalization path represents the industry’s attempt to break through domestic policy constraints, Dabo Medical’s diversification reflects the idea of platform-based development, and Aikang Medical’s steady adherence reflects the value of professional deep cultivation.

Against the background of a stable policy environment and reshaped industry pattern, leading enterprises with clear strategic positioning, strong execution capabilities, and financial strength will get the opportunity to be repriced. Investors should focus on how enterprises balance short-term performance pressure and long-term strategic investment, as well as the actual progress in global market expansion[0][1][2][3].

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[0] Gilin API Data - Real-time Stock Quotes, Company Profiles and Financial Analysis Data
[1] Huaan Securities Research Report - “Actively Focus on Out-of-Hospital and Overseas Markets——2025 Investment Strategy for Medical Device Industry”
[2] Huajin Securities Research Report - “Mid-term Investment Strategy for Medical Device and Traditional Chinese Medicine Sectors in 2025”
[3] Dongfang Securities Research Report - “Pharmaceutical and Biological Industry Strategy Report——Innovation Emerges, Focus on Just Needs and Going Overseas”