Domestic cochlear Hainan Haipang is expected to enjoy exclusive market

Recently, the Cochlear Implant of Shanghai Lisheng Special Medical Science and Technology Co., Ltd. has obtained the medical device registration certificate issued by the State Food and Drug Administration, which will break the current monopoly of the market by three foreign medical device giants. This is worth celebrating for nearly 30 million people with hearing impairment in China. Their lives may be changed. For Hainan Hai Yao (000566), it is also worthy of scrutiny, which proves that the company's previous decision to invest in the Lisheng Special Cochlear Project was a wise move.

The cochlear implant, also known as the "electrocochlear implant," is a small, but very complex electronic circuit and language processor, implanted electrodes, and language (digital) encoders. Because it is an electronic device that replaces the function of the human ear, it can help adults and children with severe, severe deafness recover or provide a sense of hearing. As a medical device for hearing-impaired people, this market is mainly occupied by the products of Cochlear Australia (the earliest cochlear implant), Advanced Bionics of the United States and MED-EL of Austria.

Due to the lack of independent intellectual property rights in China, there is no domestic cochlear implant before this, and the market has been monopolized by foreign products. However, it should not be overlooked that patients with deafness caused by diseases or other causes are increasing year by year. According to the second national sample survey of handicapped persons, the number of hearing-impaired persons in the country amounts to 27.8 million. As the domestic cochlear implants are monopolized by foreign products, the lack of competition in the market has resulted in expensive products, which are all around RMB 150,000 to RMB 200,000/set. Many domestic patients are not treated because they cannot afford high equipment costs.

It is gratifying to note that the initial pricing of domestically produced cochlear implants that are expected to be listed on the market is 50,000 yuan each. If the operating cost is 10,000 yuan, the total cost is about 60,000 yuan, which is more than the total cost of installing imported cochlear implants. The cost is about two-thirds lower. This has also made more domestic working-class people with hearing impaired see hope.

When the technology is close, when the 200,000 yuan of imported equipment and 60,000 yuan of domestic equipment compete, the victory or defeat is self-evident. Xu Lihong, vice chairman of Hainan Haipang, said in an interview with the media that the Cochlear Implant produced by Lisheng Special is more suitable for the “Chinese Language Department”, while the imported artificial cochlea is still based on English research and development. This makes Li Sheng special cochlear implants more suitable for the domestic market.

Huachuang Securities analyst Liao Wanguo believes that cochlear implants will soon form an industry, and Lisert’s first self-developed cochlear implant will be approved for production and sales, which will break the monopoly of foreign manufacturers. With the reduction of domestic pricing, the demand for cochlear implants in deaf people in China will be greatly reduced.

It is worth noting that at the level of the FDA, the Dalian Hongdingkang mono-cochlear cochlear implant at that time and Li Shengsheng were rejected. The Hangzhou Nuerkang cochlear implants also need to be supplemented with clinical trial materials. The acquisition of the special official approval document means that Hainan Haipang has become the only domestic manufacturer of cochlear implants, and it is expected to enjoy the market for a period of time in the future.

However, Hainan Haipang’s fixed increase has not yet been completed and it is required to obtain approval of the Securities Regulatory Commission to obtain 51% of Lisheng Special. Most institutions are optimistic about this. Hainan Haipiao should have no suspense in completing the issuance of additional funds in the first half of this year. By then, Hainan Haipi will enter a full harvest of profits.

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