(Report Producer/Author: Zheshang Securities Sun Jiansi Qingrui)
<h1 class="pgc-h-arrow-right" data-track="28" >1. China's surgical robot market size: 44% CAGR </h1>
The global surgical robot market size, with a compound annual growth rate of 26%.
The global surgical robotics market increased from $3 billion in 2015 to $8.3 billion in 2020, representing a COMPOUND annual growth rate of 22.6%.
Frostchina forecasts that the global surgical robot market will reach $33.6 billion in 2026, with a compound growth rate of 26.2% from 2020 to 2026.
Among them, endoscopic surgical robots are the largest market segment, accounting for 63% of the overall market size of surgical robots in 2020.
The size of China's surgical robot market, with a compound annual growth rate of 44%, is much higher than that of the world.
In 2020, the size of China's surgical robot market is 425.3 million US dollars, and frostchina predicts that the Chinese surgical robot market size will be 3840.2 million US dollars in 2026, with a compound annual growth rate of 44.3%, much higher than the global 26.2%.
1.1. Market size and competitive landscape of intraperitoneal surgery robots
Endoscopic surgical robot, widely used in surgical operations. The laparoscopic surgical robot can perform a wide range of surgical procedures, including urology, gynecology, thoracic and general surgery.
It typically includes a surgeon's console, a patient-side operating cart, and an imaging system. The patient-side surgical cart covers the robotic arm holding the endoscope and the accompanying surgical instruments. The endoscope extends the surgeon's gaze into the patient's body, while the robotic arm simulates his hands and holds and directs the endoscope and surgical instruments.
1.1.1. Market size of intraperitoneal surgery robots in China
The penetration rate of endoscopic surgical robots in China is increasing year by year.
(1) The volume of endoscopic surgery has increased.
Thanks to the popularity of minimally invasive surgery in China and its unique advantages in the treatment of diseases such as early prostate cancer. From 2015 to 2020, the number of endoscopic surgeries in China grew rapidly, with a compound annual growth rate of 24.1%, and Frostchina predicts that it will continue to grow at a compound annual growth rate of 16.1% between 2020 and 2026.
(2) The demand for robot-assisted endoscopic surgery is growing.
From 2015 to 2020, the number of robotic-assisted laparoscopic surgeries in China increased from 11,445 to 47,379 per year, with a compound annual growth rate of 32.9%, frostchina expects 681098 cases in 2026 and a compound growth rate of 55.9% in 2020-2026, and the penetration rate of endoscopic surgical robots increases from 0.5% to 3.0% in 2020-2026.
China's endoscopic surgical robots, nearly 8 times the market size growth in 2026.
The market size of endoscopic surgical robots in China will be US$318.4 million in 2020, an important regional market with the greatest growth potential. The Chinese market is expected to grow rapidly at a COMPOUND ANNUAL growth rate of 39.2%, reaching USD 2315.3 million in 2026
1.1.2. Competitive landscape of intraperitoneal surgery robots in China
There are few domestic competitors, and only Leonardo da Vinci has been approved.
As of June 30, 2021, only da Vinci Si and Da Vinci Xi surgical systems in China are NMPA certified and are used less than 10% of all Tertiary Grade A hospitals in China.
In addition to Tumay, only two endoscopic surgical robots in China are in clinical trials, namely Weigao's Microhand-S and Condor's Condor system, but neither robot has yet been clinically completed and cannot be applied to urology.
Tumai is the first four-arm endoscopic surgical robot to complete a registered clinical trial. If Toumai is approved and commercialized, it will primarily compete with the Da Vinci surgical system in the Chinese market
1.2. Orthopedic surgical robot market size and competitive pattern
Orthopedic surgical robot, widely used in joint replacement surgery. Orthopedic surgical robots are mainly used in three types of surgery, namely joint replacement surgery, spine surgery and orthopedic trauma surgery. Robot-assisted joint replacement surgery is the most widely used, frostchina data shows that the global market size of joint replacement surgery robots in 2020 is 725 million US dollars, accounting for 52% of the global orthopedic surgical robot market size.
1.2.1. Market size of joint replacement surgery robots in China
The clinical use and penetration rate of robot-assisted joint replacement surgery have grown rapidly. In 2016, China performed the first robotic-assisted joint replacement surgery.
From 2015 to 2020, the number of robot-assisted joint replacement surgeries completed in China each year increased from 0 to 243, and Frostchina predicts that it will reach 79,964 cases in 2026, with a compound annual growth rate of 162.8%. Surgical penetration increased from 0.1% in 2015 to 3.1%
The market size of joint replacement surgery robots has grown more than 20 times in 5 years.
In 2020, the market size of Joint Replacement Surgery Robots in China will be $14.8 million, and Frostchina predicts that the market size of Joint Replacement Surgery Robots in China will reach $332.3 million in 2026. 68% CAGR from 2020 to 2026.
1.2.2. Competition pattern of joint replacement surgery robots in China
Only one approved orthopedic robot.
As of June 30, 2021, the RIO surgical robot developed by MAKO Surgical Corporation (which was later acquired by Stryker Corporation) is the only joint replacement surgical robot approved and registered by the State Food and Drug Administration, and Honghu is the only joint replacement surgical robot developed by a Chinese company with an autonomously developed robotic arm.
<h1 class="pgc-h-arrow-right" data-track="55" >2. Minimally invasive surgical robots: China's "intuitive surgery", the future "Da Vinci" </h1>
2.1. Products: Covering five major surgical robots
Five major surgical robots developed.
The company is the only company in the world that covers the portfolio of surgical robots in five major and fast-growing surgical specialties (i.e., endoscopic, orthopedic, pan-vessel, transnatural canal and percutaneous puncture surgery).
Three core surgical robot products.
The company's three flagship products are the Toumai ® laparoscopic surgical robot, the dragonfly eye ® three-dimensional electronic intraperitoneal endoscope and the Honghu ® orthopedic surgical robot, all of which have been included in the Special Review Procedure for Innovative Medical Devices of the State Food and Drug Administration (i.e. the "Green Channel").
Tumai and Honghu are in the registration approval stage, while Dragonfly Eye has been approved by the State Food and Drug Administration in June 2021.
2.2. R&D: More than 60% of R&D expenditure accounts for more than 60% of R&D expenditure.
From 2019 to June 30, 2021, the company's net loss during the year/period was 0.69 billion yuan, 209 million yuan and 243 million yuan, respectively.
The company's products have not been commercialized, there is no operating income and costs, the main expenditure is R & D expenditure, 2019-2021.6.30, R & D expenditure in the year / period of 0.62 billion yuan, 135 million yuan and 160 million yuan, of which about 50% of the R & D expenditure for R & D personnel salary payment.
On June 30, 2021, the company has a total of 290 R & D personnel, more than 60% of whom have master's degree or above. 71 invention patents.
As of June 30, 2021, the Company has 118 patents in China, including 71 invention patents, 9 utility models and 38 design patents. Holds 23 patents overseas.
2.3. Future: Filling the gap in the market and benchmarking intuitive surgery
2.3.1. Policy: Encourage the application of surgical robots, once the company's products are approved, or will quickly occupy the market
The price is high, there are few manufacturers, and the penetration rate of surgical robots is low. As of December 31, 2020, only 189 endoscopic and 17 joint replacement surgery robots have been installed in China, with penetration rates of 0.5% and 0.1% respectively. In contrast, the United States has installed 3727 endoscopes and 1060 joint replacement surgery robots, with penetration rates of 13.3% and 7.6% respectively.
We analyze the reasons for the low penetration of surgical robots:
(1) The price is too high.
At present, the da Vinci surgical robot is about 20 million yuan each, the mechanical arm needs to be replaced after 10 uses, and the annual replacement and maintenance cost is nearly 1 million yuan;
(2) Fewer manufacturers.
Surgical robot technology requirements are high, although many manufacturers develop, but few approved manufacturers. On the one hand, it leads to the small intensity and scope of market education, resulting in many hospitals not being introduced; on the other hand, manufacturers have absolute bargaining power, resulting in excessively high prices and difficult to popularize.
The policy encourages the application of surgical robots, and the inclusion of surgical robots in medical insurance may effectively improve the price problem.
In February 2021, the Ministry of Industry and Information Technology issued the "Medical Equipment Industry Development Plan (2021-2025)" for comment, encouraging the standardized application of surgical robots in the treatment of major diseases.
In April 2021, Shanghai included the da Vinci laparoscopic surgical robot in medical insurance, and in August 2021, Beijing included the surgery and disposable supporting consumables supported by the Tianzhihang orthopedic surgical robot into the medical insurance.
We believe that the pilot in developed areas will effectively promote the effective application of surgical robots in prostate surgery, orthopedic surgery and other difficult surgeries, which is conducive to the promotion of the company's surgical robots in China.
The small number of approved manufacturers helps the company to quickly occupy the market.
As of June 30, 2021, only Leonardo da Vinci has been approved for domestic laparoscopic surgical robots, and only RIO for joint replacement surgery robots have been approved. We believe that once the company is successfully commercialized, it will effectively fill the market gap of surgical robots in the domestic market and quickly occupy the domestic market.
2.3.2. Commercialization capability: or price advantage, backed by channel advantage
Da Vinci's pricing is too high, and domestic products may have a price advantage. Da Vinci surgical robots are priced in a sub-region and are the highest sold in China, with about 20 million yuan per unit.
In addition, the four robotic arms are used as high-value consumables and need to be replaced every 10 times of use, and the price of each robotic arm is about 100,000 yuan.
And every year need maintenance services, the annual replacement and maintenance cost of nearly 1 million yuan. The company's product quality benchmark da Vinci robot, if it can provide lower price alternative products, or will effectively break into the domestic blank market.
The company is backed by minimally invasive medical treatment and has certain channel advantages.
(1) Minimally invasive medical care covers more than 2400 hospitals in China, and has certain channel advantages.
Minimally invasive medical is a leading enterprise of high-value consumables in China, with products covering cardiovascular consumables, orthopedics, etc. At the end of 2020, minimally invasive medical products cover more than 2,400 hospitals in China, with certain channel advantages.
(2) The surgical robot is highly personalized, and it is difficult to replace the latter.
Minimally invasive surgical robot is the only domestic into the NMPA registration application stage of abdominal and joint replacement surgery robot manufacturers, and surgical robots often need to comply with the doctor's personalized operation, once the choice of manufacturers, replacement learning costs and product costs are higher, once selected, the latter is difficult to replace, help the company to quickly stabilize the market.
2.3.3. Comparable Companies: Intuition Surgery up 172 times and market capitalization up 375 times
Intuitive Surgical's performance rose 172 times and its market value rose 375 times. The global demand for surgical robots has surged, and surgical leaders have actively laid out the direction of surgical robots.
As one of the earliest companies to lay out surgical robots, relying on da Vinci surgical robots and related consumables, Intuition Surgery has increased its total operating income by 172 times since its listing on June 13, 2000, its market value has risen by 375 times, and its stock price has risen from $2.10 per share to $341.52 per share.
<h1 class="pgc-h-arrow-right" data-track="15" >3 </h1>
1. The risk that the company's products will not be approved and commercialized.
The company does not currently have operating income, the company's prospects depend to a large extent on the success of the product under development, if due to policy supervision or the quality of the product itself, the product can not be approved or can not be commercialized, will have a significant adverse impact on the company's future.
2. The risk of intensified competition in the surgical robotics industry.
Overseas leaders have mature surgical robot products, domestic leaders and start-up companies are also actively engaged in the development and registration of surgical robots, surgical robots personalized operation is strong, it is difficult to be replaced by the latter entrants, if the company fails to be successfully approved for listing or the layout of the market is not effective, will have a significant impact on the company's prospects.
3. Risk of poor iteration of product updates.
The company's product line is relatively single, if the company can not smoothly update the iterative product line in the later stage, it is easy to be replaced by products with higher quality, lower price and stronger clinical applicability, which will have a significant adverse impact on the company's operation.
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