Quantum Medical: The Grassroots Imaging Equipment Dark Horse Valued at $14 Billion Files IPO Prospectus

China's medical imaging equipment market is in a period of rapid development, exhibiting two major trends—Increased Localization Rate, domestic substitution has been achieved in the field of low- to mid-end imaging equipment, with the localization rate for CT scanners with fewer than 64 slices exceeding 50%;Volume Expansion at the Primary Care Level, as the tiered diagnosis and treatment system is implemented and the "Thousand Counties Project" takes root, demand for imaging equipment at the primary care level is growing, making it a fiercely contested market.

Meanwhile, QuantumTec Medical, a domestic manufacturer that entered the imaging equipment sector from the grassroots level, is emerging as a dark horse.The company’s valuation has reached tens of billions, ranking second on the Innovative Medical Devices List of the 7th Top 100 Conference, which has just concluded.How has QuantumTec Medical, a quiet contender, carved out its niche and achieved a valuation of RMB 10 billion in the fiercely competitive medical imaging equipment market dominated by industry giants?

 Future Healthcare Top 100: Innovative Medical Devices List

QuantumTec Medical’s valuation of tens of billions is derived from its market selection, industry position, commercialization achievements, and revenue.

QuantumTec Medical has entered the rapidly growing market for medical imaging equipment, pursuing global expansion with business operations covering more than 100 countries and regions. According to Frost & Sullivan statistics, the global market size for medical imaging equipment reached $70.4 billion in 2021,In the same year, the domestic market size reached RMB 95.4 billion and is projected to grow to RMB 148.6 billion by 2026, with a compound annual growth rate (CAGR) of 9.3%, significantly higher than the growth rate of the global medical imaging equipment market.

Medical imaging equipment constitutes the largest sub-segment of China's medical device industry and is a highly competitive arena. Previously, QuantumTec Medical was not widely recognized; however, in recent years, the company has become active across various sub-segments of the medical imaging equipment sector, particularlyAchieved domestic leadership in the field of 32-slice CT。

In this rapidly evolving sector, QuantumTec Medical boasts a comprehensive portfolio of imaging equipment and services. Its current lineup includes over 20 DR models, 10 CT systems, and 7 MR scanners, covering everything from practical, cost-effective devices that meet basic clinical needs to high-end imaging solutions. The company has strategically chosen to prioritize the primary care market while fully leveraging the leading role of renowned hospitals. CurrentlyImaging equipment products have been deployed in over 5,000 hospitals across China., including many well-known benchmark hospitals in China.

QuantumTec Medical’s imaging equipment products have gained widespread clinical recognition; in terms of profitability,Since 2020, the company has achieved a 32% increase in revenue and a 20% increase in profit for three consecutive years.。

As the market for primary-care imaging equipment expands, QuantumTec Medical’s “rural-encircling-urban” strategy has begun to yield results. Bolstered by cost-effective products and a comprehensive service chain, the company is poised for further growth.

As China’s population ages and the demand for accessible, local medical care grows, the national government is vigorously strengthening primary healthcare by promoting talent development and the deployment of imaging equipment. Consequently, the demand for imaging equipment at the primary care level continues to grow and upgrade.

 Policy on the Configuration of Imaging Equipment in Primary Healthcare Institutions

According to the Statistical Bulletin on the Development of China’s Health and Wellness Services, by the end of 2021, there were approximately 1.03 million medical and health institutions nationwide, with nearly 980,000 being primary care institutions. In 2021, primary care medical and health institutions handled 4.25 billion patient visits, accounting for 50.2% of the total national consultations. For manufacturers of medical imaging equipment, the market share in high-end medical institutions is limited; the vast primary care market represents the main opportunity.

Meanwhile, in the procurement of medical equipment by primary healthcare institutions across multiple provinces and cities, eligibility has been explicitly restricted to domestically manufactured products, with imported products excluded from bidding. This policy creates greater room for development for domestic manufacturers. However, this does not imply a lowering of standards; primary healthcare institutions require high-quality, cost-effective imaging equipment. Domestic manufacturers can reduce costs through independent research and development, local production, and economies of scale achieved via larger procurement volumes, thereby leveraging volume to secure competitive pricing.

Given the shortage of physicians and limited technical expertise at primary healthcare institutions, requirements for imaging equipment and services are being upgraded. First,High Cost-Effectiveness, medical imaging equipment should achieve relative affordability with high quality; secondly,Comprehensive Features, Stable Performance, thereby enhancing the efficiency and quality of imaging examinations and promoting the standardization of imaging results between primary healthcare institutions and tertiary hospitals; thirdly,Equipped with high-quality, responsive after-sales servicePrimary healthcare institutions rely more heavily on manufacturers’ guidance and maintenance services; a model of complete reliance on distributors is inadvisable, and manufacturers should establish their own service networks.

The primary healthcare market has become a fiercely contested battleground, with domestic and international giants such as GE, Philips, Siemens, and United Imaging vigorously expanding their presence in this sector in recent years. QuantumTec Medical strategically entered the market by focusing on primary care institutions from the outset, thereby securing certain first-mover and localization advantages.

Since its inception, QuantumTec Medical has been dedicated to developing affordable, high-quality imaging equipment tailored for primary healthcare settings. The company prioritizes independent research and development, having established four R&D centers in Beijing, Shenyang, Hangzhou, and Fujian Province in China, with three additional centers currently under planning and construction. It has also set up an R&D center in North America.R&D Personnel Account for Over 35%. To date,QuantumTec Medical has obtained more than 240 national patents, the company's product portfolio covers high-, mid-, and low-end CT, MRI, and DR products.

In terms of product innovation, QuantumTec Medical pioneered the launch of a large-bore 32-slice CT system, characterized by rapid scanning speed, extensive imaging coverage, and robust continuous exposure capability, thereby filling the global gap in large-bore 32-slice CT technology. Additionally, its independently developed 3.0T MRI system has achieved overall technical specifications at an internationally advanced level.

The company has established a high-end imaging product manufacturing base in Hangzhou, focusing on the research, development, and production of premium products such as 62-slice/124-layer, 64-slice/128-layer, and 128-slice/256-layer CT scanners, 64-slice large-bore CT scanners, and 3.0T MRI systems.

Meanwhile, the localization of medical imaging equipment relies on effective supply chain management. QuantumTec Medical boasts a stable supply chain and independently developed core technologies and components.More than half of the components in imaging equipment are independently developed., free from the constraints of overseas suppliers, which is rare among domestic manufacturers. The company always prioritizes overcoming "chokepoint" technologies, striving to reduce production costs while enhancing product stability.

In the MR field, QuantumTec Medical independently develops core components such as spectrometers, gradient chains, and RF chains. In the CT field, the company has independently developed core technologies for high-power CT high-voltage systems capable of prolonged continuous exposure, system imaging algorithms, and image reconstruction; it has also independently developed photon-counting detectors, pioneering the integration of domestically produced chips into detector design. In the DR field, the company has independently developed high-frequency high-voltage technology, core electrical control technologies, core DR image algorithms, and professional AI-based image post-processing software tailored specifically for the Chinese population.

It is precisely based on its independent core technologies, robust supply chain, and strong mass-production capabilities that QuantumTec Medical can deliver imaging equipment products with high cost-performance ratios that meet clinical needs. For instance, taking into account the level of primary healthcare and market conditions in China, QuantumTec Medical pioneered the development of a 32-slice CT scanner tailored to the Chinese population, offering high quality at an affordable price. This system accommodates various patient body types and positioning requirements, achieving comprehensive coverage of over 30+1 clinical applications, and quickly emerged as a market leader upon its launch. It is reported thatQuantumTec Medical's 32-slice CT is priced 50% lower than imported products。

Following equipment installation, QuantumTec Medical provides services such as user training, long-term maintenance, and free software upgrades, ensuring “24/7, On-Demand”. To date, the company’s service network has covered China.

Driven by high cost-performance products and high-quality services, QuantumTec Medical has achieved significant volume growth at the primary care level. According to incomplete statistics,From 2020 to 2022 alone, the company installed its systems in over 2,000 primary healthcare facilities.。

Driven by policy support and medical-engineering collaboration, the decentralization of medical resources is an inevitable trend. The market for primary care imaging equipment will continue to grow, with increasingly diverse product demands driving devices toward miniaturization and intelligence. QuantumTec Medical will capitalize on these trends to continuously expand its presence in the primary care market, maintain its leading advantage, break through in the high-end equipment sector, and consistently empower primary healthcare.