Market senses blood

Dialysis leader set to IPO


Weigao: a leader in the 'blood' purification' industry

As China ages, so the need for dialysis will increase. Chronic kidney disease is much more common in old age, often accompanied by, or caused by, diabetes and high blood pressure.

The treatment for advanced kidney disease (when the organs have lost approximately 80% of their function) is either dialysis or a kidney transplant – an operation that is rare in China.

Currently three million people in China require regular dialysis sessions that help to remove life-threatening toxins from the blood – although the cost of such treatment means that only about half a million patients actually receive the care they need.

More people are expected to suffer kidney disease as the population ages and diagnoses will also increase as traditionally underserved rural communities are brought into the national healthcare system.

All of this means that the Chinese have a burgeoning need for dialysis equipment – ideally domestically-made but manufactured to international standards so that the public doesn’t feel compelled to demand foreign-branded technology.

One firm making this kind of equipment is Shandong Weigao Blood Purification Products, which wants to raise about $500 million on the Hong Kong Stock Exchange (making it potentially one of the bourse’s larger IPOs of the year).

Weigao, which is also known as Wego in English, is one of two main suppliers in China’s dialysis market – the other being Fresenius Medical Care, a German-American brand that also supplies the UK’s National Health Service with dialysis equipment.

There are two main types of dialysis: haemodialysis where blood is taken out of the body and filtered (this is by far the most common method in China) and peritoneal dialysis where a dialysis solution is pumped into a patient’s abdominal cavity and toxins are expelled through the intestinal walls.

Weigao provides equipment for both processes, as well as for extracorporeal blood circuits in which blood needs to be pumped around a body during surgery.

Other off-list deployments for dialysis machines include blood purification programmes that claim to improve skin luminosity and boost “general health”.

This practice began to get a following in China after South Korean actress Song Jihyo was filmed having the procedure two years ago. Since then, the medical establishment has issued a strong warning that such procedures are pointless and risky.

Weigao reckons that China’s market for haemodialysis medical devices will double from sales last year of about Rmb13.3 billion to Rmb28 billion in 2026. The peritoneal dialysis fluid market is expected to jump from about Rmb3.8 billion in sales to closer to Rmb8.8 billion in the same timeframe.

“Driven by the favourable government policies supporting the growth of the industry and the expanding insurance coverage for major diseases, China’s blood purification market is expected to continue to grow rapidly,” the prospectus predicted.

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