Chinese Medtech Firm Tianyi Medical Emerges as Global CRRT Leader Through Acquisitions of Nikkiso and Medtronic's Bellco Businesses

The global blood purification market has long been dominated by companies from Germany, Italy, and Japan. However, previously obscure Chinese enterprises are now beginning to shine.

Recently, a Chinese blood purification consumables company acquired the CRRT-related businesses of a Japanese hemodialysis giant and Medtronic. TIANYIMED, a listed company in Ningbo, advanced two acquisitions: one was the purchase of the CRRT (Continuous Renal Replacement Therapy) business from Nikkiso, a long-standing leader in hemodialysis, for 400 million yuan. Nikkiso is a leading Japanese manufacturer of hemodialysis equipment, with over 30% market share in Asia's dialysis machine market and more than 15% in the European market.

Second, it plans to make a cross-border acquisition of Medtronic's BELLCO CRRT filter business for 11.99 million euros. Bellco is a well-known brand in blood dialysis and extracorporeal blood purification systems and was acquired by Medtronic in 2016.

CRRT is mainly used for blood purification treatment in acute critically ill patients and is irreplaceable in complex conditions such as ICU critical care and multi-organ failure.

Through two acquisitions, TIANYIMED has become the first supplier in China capable of providing a complete CRRT solution globally. Previously, TIANYIMED's main product was dialysis tubing, with revenue of 310 million yuan in the first three quarters of 2024.

These two acquisitions reflect a new trend in the hemodialysis industry: globalization and vertical integration of the industrial chain have become irresistible forces.

TIANYIMED Acquires CRRT Devices and Filters, Important Products in the ICU.

The technical threshold of CRRT devices builds up the industry's moat. CRRT demands high product reliability and stability, with significant barriers in research and development as well as production.

Unlike conventional hemodialysis with a blood flow rate of 400-500 ml/min, CRRT achieves continuous purification through low-speed operation at 100-200 ml/min. This method not only removes small molecular toxins but also effectively handles medium and large molecular toxins.

The CRRT market once experienced explosive growth.The surge in ICU construction after the COVID-19 pandemic has driven rapid growth in the CRRT market, boosting the performance of domestic companies such as Jafron Biomedical and Mountain Medical.

Mountain Mountain Obtains a Large Number of CRRT Orders in Early 2023 Medical Institution Procurement Projects, with Significant Increases in Revenue and Profit Growth Rates. In 2023, revenue and net profit attributable to shareholders were RMB 690 million and RMB 194 million, representing year-on-year growth of 80.65% and 228.34%, respectively.

The CRRT market is still in continuous growth.An industry insider said, "The end customers of CRRT devices are extending from tertiary hospitals in central cities to grassroots hospitals in districts and counties, and the market capacity of CRRT devices is still continuously increasing."

In addition, the expansion of CRRT's multi-department applications is also a driving force for the growth of the CRRT market.CRRT devices are currently mainly used for ICU patients. The expansion of CRRT applications from critical care to various departments such as infectious diseases, cardiac surgery, respiratory, hepatobiliary, immunology, and dermatology is also expected to increase the market capacity for CRRT.

The current CRRT market presents a competitive landscape of "foreign dominance with domestic pursuit." Foreign brands such as WanYiTe (formerly Baxter's nephrology business) and Fresenius still occupy a significant share, but domestic manufacturers represented by Jafron Biomedical and Shandong Mountain are rapidly emerging.

Notably, this acquisition enables TIANYIMED to directly obtain Nikkiso's mature CRRT technology system. Nikkiso's Aquarius series of CRRT devices, one of the mainstream devices with a large installed base in China, will directly help TIANYIMED seize the high ground of the domestic CRRT market through its technology transfer.

This "technology introduction + independent innovation" path has already seen successful precedents. In 2010, Weigao Group obtained the core technology of dialysis machines through a joint venture with Nikkiso, eventually achieving a breakthrough with a 22.1% market share for domestically produced hemodialysis machines in China. Now history repeats itself—TIANYIMED’s acquisition not only signifies an acceleration in the localization process of CRRT equipment but will also drive the coordinated growth of complementary consumable products.

The two acquisitions of TIANYIMED are also closely related to industry trends, marking that China's blood purification industry has officially entered a period of deep integration.

Currently, the pressure of medical insurance cost control in China's blood dialysis market is evident. Provincial alliance bulk procurement of blood dialysis consumables has been carried out multiple times, leading to a significant drop in the prices of major blood purification products, affecting companies' profitability. In January 2024, the 24-province alliance led by Henan Province completed bulk procurement of blood dialysis consumables, with the highest price reduction reaching 74% and an average decrease of 48.51%.

China's hemodialysis market has long been in a situation where "every company is the king of its own domain," with companies such as Weigao, BaoLaiTe, Shanguishan, Sanxin Medical, and Jianfan Biotech each dominating segments like equipment and consumables. However, as centralized procurement becomes more routine, the gross profit margin of individual products has been squeezed.

Hemopurification Consumables and Equipment Major Brands Data Source: Mountain Outside Mountain Prospectus

Research by Huachuang Securities shows that the industry is experiencing a critical turning point from a "rapid growth phase" to a "consolidation phase," with companies building cost moats by vertically integrating through M&A to close the loop of "equipment + consumables + services."

Forecast of China's Dialysis Industry Development, Huachu Securities

Chinese companies such as SWS, WEGO Blood Purification, Biolight, and Sanxin Medical have also completed vertical layout of the industrial chain.

Hemodialysis Device Companies' Layout in China and Abroad

TIANYIMED's recent two consecutive M&A moves are precisely the footnote of this industrial consolidation— as the wave of medical insurance cost control sweeps across, building全产业链 competitiveness through vertical integration is becoming the survival rule for domestic companies in China.

The Rise of Fresenius, the Global Leader in Hemodialysis, Offers an Excellent Model for Chinese Enterprises. Starting from a German pharmacy workshop, this company achieved three key milestones over half a century: entering the dialysis field in 1966; mastering the core technology of polysulfone fiber membranes in 1983; and after 2000, during the wave of downstream industry consolidation caused by U.S. Medicare’s focus on cost control for hemodialysis patients, achieving business expansion through large-scale mergers and acquisitions to become the world's largest dialysis service provider.

Fresenius' core strategy has always revolved around "technology depth + service extension," ultimately forming a complete ecosystem covering consumables production, equipment R&D, and dialysis services, capturing over 30% of the global market share.

How can Chinese companies survive during the industry consolidation phase after completing the integration of the industrial chain?

Mid-term Decisive Battle in the Industrial Chain:Pioneers in China are accelerating the pace of integration by acquiring and developing in-house to fill gaps in their product portfolios, such as dialysis machines, dialyzers, and perfusion devices. However, the real challenge lies in achieving a "1+1>2" synergistic effect — where the sale of consumables drives equipment installation, and the installed base of equipment, in turn, boosts the usage of consumables, forming a self-reinforcing commercial closed loop.

Long-term Winning through Innovation: When the industry enters the maturity stage, the key to success will shift to material innovation. Currently, China relies on imports for high-end dialysis membranes, and a breakthrough in synthetic membrane technology is the passport to冲击全球高端市场.

After completing the domestic integration, the real competition will unfold in the overseas market.

When TIANYIMED made consecutive acquisitions of Nikkiso and Medtronic's CRRT business in a "snake swallowing an elephant" manner, the globalization ambition of China's hemodialysis companies became evident — these two acquisitions were far from simple scale expansion but rather precise positioning in overseas markets. By gaining access to Nikkiso’s physical networks in Germany, Belgium, Thailand, and other regions, TIANYIMED has successfully opened up a channel for CRRT equipment to go global, forming a "device + consumables" dual-driven model with its existing consumables business, becoming the first Chinese company with the capability to provide a complete global CRRT solution.

TIANYIMED is not the first blood purification company to recognize the potential of overseas markets. A decade ago, China-based hemodialysis companies began gaining market access in multiple countries. After completing the necessary regulatory approvals and securing distributors, their products have seen significant growth in recent years.

In the blood purification market, domestic enterprises have already tasted initial success in overseas markets and are beginning to enter a harvest period.

Financial data from Jafron Biomedical and Mountain River Mountain shows that overseas revenue has become a growth engine for China's hemodialysis companies. Mountain River Mountain stated that its overseas export business in the first three quarters exceeded 90 million yuan, accounting for 22.06% of its main business revenue. The company’s hemodialysis machines have been successfully exported to nearly 100 countries and regions in Asia, Europe, the Middle East, South America, and Africa. In 2024, 200 units will be installed in Russia, and in 2025, installations are expected to begin in Mexico and Brazil. Overseas exports account for 50% of the company’s total hemodialysis machine sales.

Jafron Biotech's overseas revenue in the first half of 2024 increased by 64% year-on-year. The company has launched a comprehensive outbound strategy and completed access in more than 90 countries.

Founder of Jafron Biomedical, Dong Fan, once stated in an interview: "Currently, our overseas performance has not yet reached the expected volume. At present, our overseas markets are divided into two categories: key countries and non-key countries. This year, we will first develop 10 key countries and station personnel there, while for non-key countries, we will focus on developing local distributors. Next year, we will target another 10 key countries, gradually expanding our reach worldwide. Moreover, we aim to boost overseas performance through a strategy led by expert participation in academic conferences."

Biolight's export revenue in 2023 was 248 million yuan, accounting for approximately 21% of its operating revenue. The export revenue mainly came from the income of patient monitoring products, and the blood purification series also had export business. Products such as hemodialysis equipment, dialyzers, and dialysate filters have been sold overseas.

Another blood dialysis equipment company, Sanxin Medical, achieved an income of 520 million yuan in the blood purification business in the first half of 2024, representing a growth of 25.55%. The growth in exports of dialysis equipment was also a key driver of business growth.

The key to the growth of China's blood purification enterprises overseas lies in accurately capturing the explosive demand in developing country markets.From a global market perspective, blood purification products are dominated by technologically advanced European countries such as Germany and Italy. These markets have high entry barriers and are not the primary destinations for Chinese hemodialysis products going overseas. However, with the exception of Russia, where the exit of several European and American hemodialysis companies has created growth opportunities for domestic enterprises.

Most emerging countries lack the core technology of hemodialysis products and rely heavily on imported products, matching the supply and demand of Chinese manufacturing. In Southeast Asia, medical infrastructure is in a period of rapid development. For example, Indonesia has seen an increase of 1,000 hospitals over the past decade, leading to a huge demand for basic medical equipment, especially life-support devices.

A person in charge of overseas business at a Chinese hemodialysis company said: "Chinese hemodialysis companies have gained a certain market share in Indonesia with their excellent product quality and competitive pricing."

In emerging markets, Brazil in South America, Saudi Arabia in the Middle East, and Mexico are key markets for the overseas expansion of China's blood purification industry.

In emerging markets, companies with comprehensive solutions have a more competitive edge. In the blood purification sector, including dialyzers, dialysis tubing, perfusion devices, dialysate/dialysis powder, enterprises that offer one-stop hemodialysis solutions can enhance customer loyalty and better expand into overseas markets.

Hemodialysis is an essential treatment. In the long term, the incidence of chronic kidney disease remains stable, and the number of end-stage renal disease patients increases steadily each year. The global blood purification market will continue to expand. Companies that can both master the art of industrial chain integration and deeply understand the path of technological innovation may replicate Fresenius' legend and carve out a Chinese coordinate on the global blood purification landscape. We look forward to domestic companies transitioning from trade exports to brand exports.

"Yi" Together Learn | CRRT Equipment Overview —— TIANYIMED

Review of 25 Hemodialysis Machine Companies —— SIYU MedTech

Hemodialysis Industry: Huge Potential Space on the Demand Side, Multiple Opportunities on the Supply Side - Huachuang Securities

"Review of the Highlights from the 'Blue-Green Relay, Zhuhai Businessman Interview' with Chairman Dong Fan —— Zhuhai Federation of Industry and Commerce General Chamber of Commerce"

Gao Guangyong, Chairman of Shanshan Mountain: Technological Innovation is the Core Weapon of Success — Xinhua News Agency