Analysis of Changes in Winning Bids for Chunli Medical's Joint Prostheses in Centralized Procurement

Based on the collected data, I have sorted out in detail the changes in the winning bid prices of Chunli Medical’s joint prostheses in centralized procurement.

Artificial joints were the first orthopedic category included in national centralized procurement, going through two stages:

and . As a leading domestic joint prosthesis enterprise, Chunli Medical performed excellently in both procurement rounds [0][1].

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Product Type	Bidding Unit	First-Year Intended Procurement Volume (units)	Winning Bid Price (CNY)	Winning Bid Price Reduction
Hip Joint - Ceramic-on-Ceramic	Group A	22,625	8,000	Approx. -85%
Hip Joint - Ceramic-on-Polymer	Group B	10,942	7,900	Approx. -77%
Hip Joint - Metal-on-Polymer	Group B	5,258	8,110	Approx. -46%
Knee Joint	-	-	Not Awarded	-

Note:

In the first round of national centralized procurement, the average winning bid price of hip joints dropped from around 35,000 CNY to about 7,000 CNY, and the average price of knee joints dropped from around 32,000 CNY to about 5,000 CNY, with an average price reduction of

82%

[2].

• Chunli Medical’s knee joint products unfortunately failed to win the bid due to high bidding prices
• All hip joint products won bids, but the market share of knee joints decreased significantly
• Under the impact of centralized procurement, the company faced the dilemma of “increasing revenue without increasing profits”

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In May 2024, the bidding for the subsequent centralized procurement of artificial joints officially opened, with the average price of the final winning products dropping by

, a significant narrowing of the price reduction range [0][1].

Product Type	Bidding Unit	Winning Bid Ranking	Demand Volume (units)	Winning Bid Price (CNY)	Price Change vs. First Round
Hip Joint - Ceramic-on-Ceramic	Group A	6	11,385	7,972	-0.3%
Hip Joint - Ceramic-on-Polymer	Group A	10	21,728	7,094	-10.2%
Hip Joint - Metal-on-Polymer	Group A	8	1,811	5,895	-27.3%
Knee Joint	Group A	10	10,544	5,408	First Award

1. Breakthrough in Knee Joints
   : The knee joint products that failed to win the bid in the first round won the bid
   for the first time
   , with a winning bid price of 5,408 CNY per unit
2. Moderate Price Reduction
   :
   • The price reduction of the ceramic-on-ceramic product, which has the highest demand, is only 0.3%
   • The price reduction of the ceramic-on-polymer product is 10.2%
   • The price reduction of the metal-on-polymer product is 27.3% (low clinical usage volume)
3. All Products Won Bids in Group A
   : All product categories won bids in Group A, indicating high clinical recognition [0]

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Product Category	First Round of National Centralized Procurement (2021)	Subsequent National Centralized Procurement (2024)	Cumulative Price Reduction
Ceramic-on-Ceramic	8,000 CNY	7,972 CNY	-85.3%
Ceramic-on-Polymer	7,900 CNY	7,094 CNY	-79.8%
Metal-on-Polymer	8,110 CNY	5,895 CNY	-60.7%

Period	Winning Bid Status	Winning Bid Price
First Round of National Centralized Procurement	Not Awarded	-
Subsequent National Centralized Procurement	Awarded in Group A	5,408 CNY

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• Recovery in Quoted Volume of Knee Joints
  : The quoted volume accounted for about 4% in the subsequent procurement, which is lower than the 12% in the first round of national centralized procurement, but it represents a breakthrough from 0 to 1 [0]
• Sharp Growth in Ceramic-on-Polymer
  : The quoted volume is 21,728 units, a
  109% increase
  compared to the first centralized procurement

• The quoted volume share of imported manufacturers dropped from 48% in the first round to 32%
• The market share of domestic manufacturers further increased to 72% [1]

• 2024
  : Affected by the implementation of centralized procurement and channel inventory adjustments, operating revenue was 806 million CNY (-33.3%), and net profit was 125 million CNY (-55.0%) [3]
• 2025
  : With the impact of centralized procurement fading, operating revenue in the first three quarters was 756 million CNY (+48.8%), and net profit was 192 million CNY (+213.2%) [4]

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Chunli Medical’s winning bid prices for joint prostheses in centralized procurement show the following characteristics:

1. Sharp Price Reduction in the First Round
   : The average price reduction in the 2021 first round of national centralized procurement was 82%, and the company’s knee joint products failed to win the bid
2. Narrowed Price Reduction in Subsequent Procurement
   : The average price reduction in the 2024 subsequent procurement was only 6%, and the price system tends to be stable
3. Breakthrough in Knee Joints
   : Won the bid for knee joints for the first time in the subsequent procurement, filling the gap in the product line
4. Moderate Price Reduction to Protect Profits
   : The price reduction of mainstream products is controlled within 10%, ensuring a reasonable profit margin for the enterprise

As the risks of centralized procurement gradually fade and overseas business expands (the proportion of overseas revenue reached 43.8% in 2025), the company is expected to enter a new stage of development [4].

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[0] SPD International Securities - Research Report on Chunli Medical (688236.CH/1858.HK): Performance Under Pressure in the Year, Expected to See a Turning Point in 2025 (https://pdf.dfcfw.com/pdf/H3_AP202410191640372742_1.pdf)

[1] Orient Securities - Leading Domestic Artificial Joint Enterprise, Looking Forward to a New Stage After Centralized Procurement (https://reportify-1252068037.cos.ap-beijing.myqcloud.com/media/production/s_08098bd6_08098bd67ae68fa8f3e9c9f58306cb6c.pdf)

[2] Sinolink Securities - Public Announcement of Winning Bid Results for the Subsequent Procurement Upon Expiration of the Centralized Volume-Based Procurement Agreement for Artificial Joints (https://pdf.dfcfw.com/pdf/H3_AP202405221634316896_1.pdf)

[3] Guosen Securities - Research Report on Chunli Medical (688236.SH): Net Profit Attributable to Parent Companies Grew 5% Year-on-Year in Q1 2025, Impact of Centralized Procurement Gradually Fades (https://pdf.dfcfw.com/pdf/H3_AP202506031684158220_1.pdf)

[4] Guosen Securities - Research Report on Chunli Medical (688236.SH): Operating Revenue Doubled in Q3 2025, Overseas Business Becomes the Second Growth Curve (https://pdf.dfcfw.com/pdf/H3_AP202511071776710393_1.pdf)