China's Largest Blood Purification Company, Weigao Blood Purification, Debuts on Shanghai Stock Exchange
Today, Shandong Weigao Blood Purification Products Co., Ltd. (hereinafter referred to as“Weigao Blood Purification” rang the listing bell, debuting on the Main Board of the Shanghai Stock Exchange under the stock code 603014.
In this IPO, Weigao Blood Purification issued 41.139407 million shares at a price of RMB 26.5 per share, with total proceeds expected to amount to approximately RMB 1.09 billion.
As the leader in the blood purification sector, Weigao Blood Purification generated approximately RMB 3.604 billion in revenue in 2024, with its blood purification business accounting for about 98.07% of total revenue. In contrast, the revenues from the blood purification businesses of listed companies such as Jafron Biomedical, Sanxin Medical, Biolight, Tianyi Medical, and Shanwaishan during the same period were RMB 2.67 billion, RMB 1.217 billion, RMB 804 million, RMB 231 million, and RMB 513 million, respectively.
(Overview of Companies and Business in the Blood Purification Industry)
In terms of revenue scale and market landscape, Weigao Blood Purification is the undisputed leading player in China’s blood purification sector: in 2023, Weigao Blood Purification in ChinaHemodialyzerThe market share in the sector stands at 32.5%, ranking first across the entire industry; in ChinaHemodialysis CircuitThe market share in the sector stands at 31.8%, ranking first in the entire industry; its exclusively distributed hemodialysis machines are domesticallyHemodialysis MachineThe market share in the sector stands at 24.6%, ranking second across the entire industry...
To date, Weigao Blood Purification’s sales network covers more than 6,000 medical institutions across 31 provinces (municipalities directly under the Central Government and autonomous regions) in China, including dialysis centers, with over 1,000 of these being tertiary hospitals.
How Did Weigao Blood Purification Rise from Zero to Become the “King of Hemodialysis in China” in Just 20 Years? How Will It Continue to Shape the Future Market Landscape of the Blood Purification Sector?
The blood purification industry is highly complex, encompassing niche markets such as hemodialysis, peritoneal dialysis, hemofiltration, hemodiafiltration, and hemoperfusion, and involving medical devices, consumables, pharmaceuticals, and other ancillary products.
(Schematic diagram of the hemodialysis treatment process, image sourced from the prospectus)
Taking hemodialysis as an example, related medical devices can be categorized into hemodialysis equipment and hemodialysis consumables. Hemodialysis equipment includes hemodialysis machines, water treatment systems for hemodialysis, and more; hemodialysis consumables include dialyzers, hemodialysis tubing, dialysis powder/concentrate, puncture needles, and so on. Each product category has its unique barriers to entry.
(Medical Devices Involved in Hemodialysis Procedures)
In 2004, Weigao Blood Purification was jointly established by Weigao Group and other natural persons, with Weigao Group holding a 70% equity stake.Since its inception, Weigao Blood Purification has focused on the field of blood purification. At that time, the domestic blood purification industry was still in its early stages, with a very low rate of product localization, and the market was basically monopolized by foreign manufacturers.
Given the monopolistic landscape, market demand, and technological barriers associated with its products, Weigao Blood Purification has prioritized the allocation of its resources and efforts to hemodialysis consumables, such as hemodialyzers and hemodialysis tubing sets.
In 2005, Weigao Blood Purification launched its first independently developed hemodialyzer.，Breaking Overseas Monopolies。Following the product’s market launch, Weigao Blood Purification did not halt its innovation and R&D efforts; instead, it intensified its endeavors to overcome upstream “chokepoint” technologies and continuously iterated its products in line with clinical needs to enhance their performance.
Specifically, the hemodialysis membrane is the core component of a hemodialyzer and represents a high-barrier “bottleneck” product. In response, Weigao Blood Purification has invested in research and development since its inception, launching its first polysulfone membrane dialyzer in 2008 and thereby achieving the initial domestic manufacturing of hemodialyzers in China.
Subsequently, Weigao Blood Purification has continued its R&D efforts, gradually launching polysulfone hollow fiber membranes characterized by high mechanical strength, excellent chemical stability, good biocompatibility, and high clearance rates for medium- and large-molecule solutes.
Leveraging breakthroughs in hemodialysis membrane technology, Weigao Blood Purification’s independently developed series of hemodialyzers has reached an industry-leading level. Its products match, rival, or even surpass the mainstream offerings from leading international manufacturers in key performance indicators such as clearance rate, ultrafiltration coefficient, and sieving coefficient.
On the other hand, following the ramp-up in product sales, Weigao Blood Purification promptly optimized and iterated its products based on clinical feedback. In 2008, it innovatively launched the low-flux F-series hemodialyzers; in 2013, it introduced the high-flux HF-series hemodialyzers; and in 2017, it rolled out medium-flux hemodialyzers...
(The Iterative Upgrade Journey of Weigao Blood Purification's Hemodialyzers)
Not only hemodialyzers,Weigao Blood Purification also independently developed its first hemodialysis tubing product in 2006., and continuously optimize the product during its commercialization process.
By 2010, Weigao Blood Purification had established extensive sales channels in the hemodialysis consumables industry, and its hemodialyzers and hemodialysis tubing sets had secured a certain market share in the domestic market.At this juncture, to enhance its competitiveness, Weigao Blood Purification has drawn reference from the product portfolios of foreign manufacturers such as Fresenius Medical Care and B. Braun, and plans to expand its product offerings from hemodialysis consumables to hemodialysis equipment, thereby optimizing its overall product layout.
However, hemodialysis machines present extremely high technical barriers, as they comprise an extracorporeal blood circulation system and a dialysate circulation system, making them highly complex. Peritoneal dialysis solutions, on the other hand, are classified as pharmaceuticals and differ significantly from hemodialysis consumables in terms of technological approach and manufacturing processes.
At this stage, Weigao Blood Purification is primarily involved in the field of hemodialysis consumables and does not yet possess the technology, personnel, or production equipment required for the research, development, and manufacturing of hemodialysis machines and peritoneal dialysis fluids.
In this context, to more efficiently and rapidly expand the product portfolio,Weigao Blood Purification Chooses to Partner with Multinational Giants, introducing world-leading hemodialysis machines and peritoneal dialysis fluid products along with their production technologies, and holding exclusive sales rights in mainland China. Multinational giants leverage Weigao Blood Purification's robust sales network to expand their presence in the Chinese market, boost revenue, and achieve a win-win outcome.
In April 2010, Weigao Blood Purification signed a joint venture agreement with Nikkiso, a long-established leader in the hemodialysis industry:The two parties will jointly establish the joint venture Weigao Nikkiso, engaged in the research and development and production of hemodialysis machines.
Following its collaboration with Nikkiso, Weigao Nikkiso, a joint venture under Weigao Blood Purification, launched its first hemodialysis machine in 2012, with sales handled by Weigao Blood Purification. Since then, Weigao Nikkiso has continuously enhanced product performance and expanded functionalities, introducing new hemodialysis machine models to meet clinical needs.
For example, in 2021, Weigao Blood Purification collaborated with Nikkiso to launch the DBB-EXA ESS, a high-end hemodialysis device tailored for the Chinese market. It is the first mass-produced hemodialysis machine in China equipped with a fully automated dialysis assistance system. Compared with traditional products, this hemodialysis machine features a fully automated dialysis system that enables one-touch automatic priming, one-touch automatic blood withdrawal and return, and one-touch automatic emergency fluid infusion.
Leveraging Nikkiso’s product technology advantages and Weigao Blood Purification’s sales network strengths, hemodialysis machines produced by Weigao Nikkiso have rapidly captured market share. According to Frost & Sullivan data, in 2023, the hemodialysis machines exclusively authorized for sale by Weigao Blood Purification accounted for a 24.6% share of the domestic hemodialysis machine market, ranking second in the industry, just behind Fresenius Medical Care.
Leveraging the market share and product portfolio advantages derived from its hemodialysis machines, Weigao Blood Purification has also achieved rapid growth in consumables such as hemodialyzers and hemodialysis tubing. In 2023, it ranked first in the industry with a 32.5% market share in China’s hemodialyzer sector and a 31.8% market share in the hemodialysis tubing sector.
In terms of peritoneal dialysis fluid products,Weigao Blood Purification signed a joint venture agreement with the globally renowned company Terumo in 2012:Jointly established the joint venture Weigao Terumo to engage in the research, development, and production of peritoneal dialysis solutions.
In 2018, Weigao Terumo obtained the first drug registration certificate for peritoneal dialysis solution, and sales were initiated by Weigao Blood Purification. Subsequently, Weigao Terumo developed a neutral, low-GDP two-chamber bag peritoneal dialysis solution and obtained its drug registration certificate in 2022.
To date, Weigao Blood Purification has established strategic layouts in the two major areas of hemodialysis and peritoneal dialysis, achieving full coverage of its main blood purification product lines, including hemodialyzers, hemodialysis tubing, hemodialysis machines, and peritoneal dialysis fluids. It also simultaneously markets dialysis-related ancillary products such as hemoperfusion cartridges, dialysis powder/solutions, puncture needles, and povidone-iodine caps for peritoneal dialysis.Becoming One of the Blood Purification Manufacturers with the Most Extensive Product Portfolio in China。
After becoming the “King of Hemodialysis in China,” Weigao Blood Purification continues to intensify its R&D investments. The prospectus reveals that the company is developing fourth-, fifth-, and sixth-generation dialyzers, with the fourth-generation dialyzer currently in the registration and approval stage and expected to be approved for market launch in 2026. Weigao Blood Purification will also develop other blood purification products, such as portable CRRT devices and dialysate filters, to further enhance its product portfolio.
Leveraging its comprehensive product portfolio and integrated blood purification solutions, Weigao Blood Purification is poised to secure a competitive edge in future market competition and continuously break through market ceilings.
Currently, there are multiple listed companies in China’s blood purification industry, such as Jafron Biomedical, Shanwaishan, Biolight, and Tianyi Medical. These companies have all established portfolios encompassing “equipment + consumables + dialysate” in the field of blood purification, although their primary products and strategic focuses vary slightly.
For example, Jafron Biomedical has established a product portfolio that includes hemoperfusion cartridges, blood purification equipment, blood purification machines, hemodialyzers, hemodialysis concentrate, and hemodialysis tubing. Its core product is the hemoperfusion cartridge, which accounted for 86.23% of total revenue in 2024. Driven by the high unit price of hemoperfusion cartridges, Jafron Biomedical’s overall gross profit margin exceeds 80% (with the gross profit margin for hemoperfusion cartridges at 85%).
Shanwaishan primarily focuses on continuous renal replacement therapy (CRRT) equipment, hemodialysis machines, hemoperfusion machines, hemodialysis concentrate, hemodialysis powder, and hemodialyzers. Its core products are hemodialysis equipment (including CRRT systems and hemodialysis machines), which accounted for approximately 66.67% of total revenue in 2024. These products are classified as high-end, with a gross profit margin of approximately 55.91%.
Sanxin Medical, Biolight, and Tianyi Medical have also established a “devices + consumables + dialysate” business layout. However, their primary products are hemodialysis tubing and hemodialysis powder/dialysate, which carry relatively low gross profit margins.
Unlike the aforementioned companies, Weigao Blood Purification’s core business is hemodialyzers. From 2022 to 2024, the revenue from its hemodialyzers amounted to RMB 1.75 billion, RMB 1.834 billion, and RMB 1.838 billion, respectively, accounting for 53.04%, 53.13%, and 52.01% of its total revenue. Hemodialyzers have high technical barriers, with a gross profit margin exceeding 60%.
(Data sourced from the prospectus)
Hemodialysis machines constitute Weigao Blood Purification’s second-largest business segment. Revenue from this product line has declined due to factors such as delays in tendering and bidding processes. From 2022 to 2024, hemodialysis machine revenues were RMB 660 million, RMB 650 million, and RMB 619 million, respectively, with their share of total revenue decreasing from 20% in 2022 to 17.54% in 2024. As tendering and bidding activities resume normal operations and large-scale medical equipment renewal projects are implemented, this business segment is expected to return to a high-growth trajectory.
Another core business is hemodialysis tubing. From 2022 to 2024, Weigao Blood Purification saw significant growth in the sales volume of its hemodialysis tubing. In 2022, the company sold 30.06 million sets of hemodialysis tubing, which increased to 39 million sets in 2024, representing a growth rate of approximately 29.74%. Driven by this increase, revenue from the hemodialysis tubing business rose from RMB 414 million in 2022 to RMB 495 million in 2024.
Overall, Weigao Blood Purification’s revenue is primarily derived from hemodialyzers, hemodialysis machines, hemodialysis tubing sets, peritoneal dialysis solutions, and other dialysis-related products, reflecting a relatively stable product portfolio. Meanwhile, the company ranks among the industry leaders in market share within key segments such as hemodialyzers, hemodialysis tubing sets, and hemodialysis machines.
Over the past two years, the medical device industry has been fraught with challenges, and the hemodialysis equipment market is no exception.
In 2023, impacted by anti-corruption policies in the pharmaceutical and healthcare sectors, medical equipment bidding projects were widely delayed or canceled, resulting in an approximately 20% year-on-year decline in total procurement expenditure.
This impact persisted through the first half of 2024. According to a research report by Guosen Securities, the total winning bid amount for medical equipment nationwide in the first half of 2024 was only RMB 52 billion, representing a year-on-year decline of 35%.
In addition, Henan Province has taken the lead in forming provincial-level alliances such as the 23-Province Alliance and the Beijing-Tianjin-Hebei “3+N” Alliance.In 2024Implementation of volume-based procurement for hemodialysis consumables has commenced, with the procured products including hemodialyzers and hemodialysis tubing sets.
Undoubtedly, centralized procurement has reduced the prices of hemodialysis consumables to a certain extent. However, for Weigao Blood Purification, centralized procurement has enabled it to achieve “volume growth in exchange for price reduction,” thereby increasing its market share.
In the centralized procurement initiative led by Henan Province, involving a 23-province alliance, Weigao Blood Purification successfully won bids for both its hemodialyzers and hemodialysis tubing. The awarded procurement volumes accounted for 26.93% and 25.62%, respectively, of the total annual procurement volume for similar products, ranking first in both categories.
Since the implementation of centralized procurement, the average ex-factory prices of hemodialyzers and hemodialysis tubing lines under Weigao Blood Purification have decreased by approximately 16% and 11% year-on-year, respectively; however, their sales volumes have increased by approximately 23% and 21% year-on-year, respectively. It is evident that the growth in sales volume has, to some extent, offset the impact of the price decline.
Weigao Blood Purification anticipates that centralized procurement will benefit industry leaders with strong product innovation, diverse portfolios, and stringent quality control, while phasing out some backward small and medium-sized enterprises, thereby accelerating the increase in market concentration.
Meanwhile, in response to volume-based procurement (VBP), Weigao Blood Purification has developed highly automated equipment and integrated it into its production systems to reduce costs and improve efficiency. The company has also enhanced its competitiveness by lowering selling and administrative expenses; for instance, its selling expense ratio decreased to 16.7% in the second half of 2024, while its administrative expense ratio dropped to approximately 4.4%.
Against the backdrop of intensified rectification in the healthcare sector and expanded centralized procurement, Weigao Blood Purification’s core business revenue from 2022 to 2024 amounted to RMB 3.294 billion, RMB 3.45 billion, and RMB 3.53 billion, respectively, demonstrating a year-on-year growth trend that underscores its competitiveness and resilience in business expansion.。
Notably, Weigao Blood Purification’s innovative products have contributed to its revenue growth. For instance, sales revenue from its hemodiafiltration filters increased from RMB 40.8316 million in 2022 to RMB 133 million in 2024, representing a growth rate of 225.73%. Meanwhile, sales revenue from its neutral peritoneal dialysis solution rose from RMB 43,500 in 2022 to RMB 86.4931 million in 2024, surging by 198,734.71%.
To cope with increasingly fierce market competition and the price reductions driven by centralized procurement, Weigao Blood Purification is also pursuing other initiatives to identify a second growth curve.
For example, Weigao Blood Purification is intensifying its efforts to expand into overseas markets as a new growth driver. From 2022 to 2024, the company’s overseas revenues were RMB 63.99 million, RMB 126 million, and RMB 195 million, respectively, representing year-on-year growth rates of 96.91% in 2023 and 54.76% in 2024, indicating a significant acceleration in growth.
Considering the implementation of volume-based procurement and the expansion of overseas business, Weigao Blood Purification has made preliminary estimates: benefiting from growth in sales revenue, the company expects its first-quarter 2025 revenue to increase year-on-year by 3.18% to 13.49%. In terms of profit, net profit attributable to shareholders of the parent company, excluding non-recurring gains and losses, is expected to rise year-on-year by 3.12% to 13.43%.
Furthermore, against the backdrop of a growing number of patients with end-stage renal disease (ESRD), supportive medical insurance reimbursement policies, and increasing penetration rates of dialysis, the market size for hemodialysis and peritoneal dialysis is expected to continue expanding. According to Frost & Sullivan, the market size of hemodialysis medical devices in China will increase from RMB 11.6 billion in 2019 to RMB 21.1 billion in 2025, and reach RMB 51.515 billion by 2030.
As the market expands and overseas markets are developed, domestic industry leaders such as Weigao Blood Purification are expected to enter a new cycle of rapid growth.