02

Strategic Layout

Hengrui's Medical Device Map

Hengrui Pharma was founded inIn 2016, the business pipeline included high-value consumables fields such as tumor intervention, peripheral intervention, and neurointervention, and research and development of medical devices for life support, imaging support, and interventional support.

From a timeline perspective, Hengrui Pharma has been quietly laying out its plans over the past decade, until earlier this year.The approval of the ECMO system has attracted widespread attention. The establishment of Rui Li Yuan Biotechnology Co., Ltd. this time can be regarded as a further extension of Hengrui Pharma into the medical device field.

Hengrui Pharma has successfully tackled the production ofThe key material PMP membrane fiber production process for the core component of ECMO, the membrane lung, can completely solve the "bottleneck" issue of raw materials in the future.The company is also actively laying out key products in critical care areas such as cVAD (catheter-based Ventricular Assist Device) and IABP (Intra-Aortic Balloon Pump).

In terms of innovative R&D, Hengrui-affiliated enterprises continue to invest heavily. According to a research report by Bohai Securities, Hengrui Pharma is a leading pharmaceutical company in China, adhering to the dual drivers of technological innovation and internationalization.

03

Industry Background

Recovery and Transformation of the Medical Device Market

In the first half of 2025, China's medical device industry saw a year-on-year decline in performance, but the second quarter showed a sequential improvement, with overseas and innovative assets demonstrating strong resilience. In Q2 2025, the industry's total revenue increased by 8.2% compared to Q1 2025, while net profit attributable to shareholders dropped by 2.2% from Q1 2025. It is expected that the trend will continue to improve sequentially in the second half of the year.

Recently, thePublication of the 11th Batch of China's National Drug Centralized Procurement Documents: The procurement plan was formulated and revised in strict adherence to the principles of "stabilizing clinical use, ensuring quality, preventing bid-rigging, and combating internal competition." The documents mention that this procurement has optimized the selection of price difference control "anchor points," no longer simply opting for the lowest bid.

Positive signals have emerged in policy, and the optimization of the centralized procurement rules reflects that the National Healthcare Security Administration is actively promoting the pharmaceutical industry."Against Involution", the domestic demand market is expected to continue improving.In terms of performance, the medical device index is expected to achieve a net profit attributable to shareholders of 42.726 billion yuan in 2025, with a year-on-year growth rate potentially turning positive at +25.91%.

Going Global Becomes a Key Growth Point for the Medical Device Industry.20From January to May 2025, the cumulative year-on-year growth of medical instruments and equipment exports reached 6%, maintaining a solid growth rate. In July 2025, the total export of medical instruments and equipment for the month amounted to 1.5 billion RMB, with a year-on-year increase of 12.3%.

04

Future Outlook

Hengrui's Medical Device Ambitions

Hengrui Pharma, as a leading pharmaceutical company in China, is implementing a dual-driven strategy of innovation and internationalization. The company ownsMore than 110 commercialized drugs, including 23 new molecular entity innovative drugs and 4 other innovative drugs.

In terms of going global, the companyBD Process Continues to Accelerate, Strengthening Cooperation with MNCs. By 2025, BD collaborations have been achieved with multiple MNCs such as Merck, MSD, and GSK. Since 2018, the company has completed 13 out-licensing deals with global partners, involving 16 molecular entities, with a potential total transaction value of approximately $14 billion.

Hengrui Pharma from the early stageFrom the approval and launch of a single innovative drug to the current comprehensive reserve of various types of innovative drugs, the company ensures the long-term commercialization process of its innovative drugs through a platform-based approach. This platform-oriented strategy is also likely to be replicated in the medical device field.

With the domestically producedThe approval of the ECMO system and the establishment of RelyRui Company mark that Hengrui Pharma's layout in the medical device field has initially formed a complete system from research and development, production to commercialization. In the future, Hengrui Pharma is likely to continue expanding in the high-end medical device field, achieving full industrial chain localization.

The medical device sector is expected to usher in"Valuation Recovery Opportunities under 'Policy Optimization + Industry Revival + Performance Recovery'." Since 2025, the bidding and tendering of medical equipment have continued to recover. As inventory is gradually consumed, the performance of some companies is expected to reverse in Q3 2025.

Hengrui Pharma's medical device layout is accelerating. FromFrom ECMO to the newly established Rui Li Yuan, Sun Piaoyang's strategic landscape is expanding.Against the backdrop of the recovery and transformation of China's medical device market, Hengrui Pharma's strategic move this time could become a significant starting point for the company's second growth curve.

In the next few years, China's medical device market will see more companies like Hengrui Pharma.CrossoverEnterprises, which not only have deep expertise in the pharmaceutical field but also break foreign monopolies in the high-end medical device sector, achieving domestic substitution, and ultimately securing a place in the global market.

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