Zhongjin Medical International Co., Ltd. (hereinafter referred to as 'Zhongjin Medical') successfully went public on March 28, 2023, issuing 1 million common shares at a maximum issue price of $8 per share, raising approximately $8 million.

During the process of listing in the US, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, sponsor, and other professional intermediary institutions in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the issuer communicate with the SEC and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on SEC-related issues regarding the industry.

The global population aging process is accelerating, and the explosive power of the elderly market has become increasingly evident in recent years, giving rise to the 'silver wave'. Wheelchairs are increasingly serving as the legs and feet of the elderly, which has continuously expanded the market scale of the wheelchair industry. As a leading participant in the industry, Zhongjin Medical will actively benefit from this trend.

The company has a long history of production experience in the wheelchair industry, with high-quality products sold globally. The company places emphasis on product research and development, increasing the R&D proportion from 7.8% in fiscal year 2020 to 9.4% in the first half of fiscal year 2022, ensuring the company's leading edge in the industry. The founder and management team are experienced.

A wheelchair is an assistive wheeled mobile device suitable for individuals who are unable to move due to physical or physiological diseases, injuries, or disabilities. With the help of a wheelchair, disabled users become more mobile and independent. Generally speaking, this equipment can be mainly classified by its propulsion method: manual wheelchairs and electric wheelchairs. Wheelchairs come in different specifications, varying in seat size, height from the seat to the floor, adjustable backs, controls, and other features that can be further customized according to user needs. Wheelchairs are primarily categorized into manual wheelchairs, electric wheelchairs, sports wheelchairs, standing wheelchairs, pediatric wheelchairs, and shower wheelchairs.

The value chain of the wheelchair market consists of upstream suppliers, midstream manufacturers and distributors, as well as downstream end-users.

Upstream suppliers mainly provide raw materials and components such as handrails, wheels, and handles for assembling manual wheelchairs. Batteries, buttons, and joystick controls are also supplied to manufacturers for assembling electric wheelchairs.

The wheelchair manufacturers in the midstream will be responsible for the design and production of wheelchairs. After the wheelchair assembly is completed, the final product will be delivered to distributors, such as wholesalers and retailers, for sales activities. In particular, some distributors may promote their wheelchair products online through e-commerce platforms.

The main end-users are individual customers such as the disabled and elderly, as well as corporate clients such as hospitals, clinics, and healthcare institutions.

Source: Frost & Sullivan report

According to the latest data released by the World Bank, the population aged 65 and above in the world has increased from about 625.4 million in 2016 to about 698 million in 2019, with a compound annual growth rate (CAGR) of 3.7%. In addition, it is believed that the elderly population will continue to increase in the coming years, which may lead to a stable demand for medical aids such as wheelchairs.

From 2016 to 2020, the total global sales value of wheelchairs rose from about $4.07 billion to about $7.15 billion, with an annual compound growth rate of 16.6%. Although the unit price of electric wheelchairs is much higher than that of manual wheelchairs, users generally prefer electric wheelchairs because they provide a better user experience, allowing them to carry out daily activities without assistance. In 2020, the sales value of electric wheelchairs accounted for about 58.0% of the total global sales value of wheelchairs, and it is expected that this trend will continue to expand in the coming years. The decline in sales value in 2020 was mainly due to the economic downturn, adversely affected by the outbreak of COVID-19 in 2020.

Driven by strong demand from downstream end-users, the total sales value of wheelchairs globally is expected to reach approximately $13.34 billion by the end of 2025, with a compound annual growth rate of 14.1% from 2021 to 2025.

Global Wheelchair Market Size by Sales Value

Forecast 2016-2025

Source: Frost & Sullivan report

According to data from the Japanese National Bureau of Statistics, the population aged 65 and above in Japan increased from about 33.656 million in 2015 to about 35.801 million in 2019, with an annual compound growth rate of 1.6%. The increase in the elderly population has driven demand for wheelchairs in Japan. The total sales value of wheelchairs increased from about $200 million in 2016 to about $3.1 billion in 2020, with a compound annual growth rate of 12.2%. The decline in sales value in 2020 was mainly due to the global economic downturn, which had an adverse impact on the outbreak of COVID-19 in 2020.

According to data from the Japanese Bureau of Statistics, as of March 2020, 28.4% of Japan's population was over 65 years old, the highest proportion in the world. According to data from the National Institute of Population and Social Security under the Ministry of Health, Labour and Welfare of Japan, by 2030, one in every three people will be 65 years old or older. By 2060, elderly citizens will account for 40% of Japan's population. With the continuous aging of Japan's population and the demand for high-quality medical facilities, the market size of wheelchairs in Japan is expected to rise from about $350 million in 2021 to about $760 million in 2025, with an annual compound growth rate of 21.3% from 2021 to 2025.

Wheelchair market size calculated by sales value (Japan)

Forecast 2016 - 2025

Source: Frost & Sullivan report

With the continuous growth of disposable income and the sustained investment by the state in healthcare expenditures brought about by medical reform policies such as the 'Healthy China 2030 Plan Outline' issued by the State Council in 2016, the demand for medical assistive devices has increased significantly in the past five years.

According to data from the National Bureau of Statistics of China, per capita healthcare and medical service expenditures increased by an annual compound rate of 9.0% from about 185.8 US dollars in 2016 to about 262.1 US dollars in 2020. Given the increase in residents' expenditures and demand for better medical facilities, from 2016 to 2020, the sales value of wheelchairs in China increased from about $1.21 billion to about $2.2 billion, with a compound annual growth rate of 16.1%. The decline in sales value in 2020 was mainly due to the global economic downturn, adversely affected by the outbreak of COVID-19 in 2020.

Due to the strong R&D capabilities of Chinese healthcare and medical device companies, a variety of electric wheelchair products have been developed to meet the different needs of end-users. In 2020, electric wheelchairs accounted for about 62.3% of the total sales value among all types of wheelchairs. With the integration of other intelligent functions such as voice control and obstacle avoidance, electric wheelchairs are expected to become more popular in China. By the end of 2025, the total sales value of wheelchairs is expected to reach about $4.29 billion, while the sales value of electric wheelchairs is expected to reach about $2.92 billion. The compound annual growth rates from 2021 to 2025 are 14.6% and 16.6%, respectively.

Wheelchair market size (China), calculated based on sales value

Forecast 2016 - 2025

Source: Frost & Sullivan report

• The elderly population is constantly increasing

According to data from the National Bureau of Statistics of China, from 2016 to 2020, the population aged 65 or above increased from about 150.4 million to about 190.6 million, with a compound annual growth rate of 6.1%. This proportion of the total population in China during the same period increased from 10.8% to 13.5%. According to data from the Japanese National Bureau of Statistics, the population aged 65 or above in Japan has increased from about 33,656 thousand in 2015 to about 35,801 thousand in 2019, with an annual compound growth rate of 1.6%.

Due to the widespread moderate to severe disabilities among the elderly due to various diseases, injuries, and chronic illnesses, the demand for wheelchair products in China and Japan has been increasing. In particular, with increased income and a trend towards better living conditions, more customers in China and Japan are willing to purchase electric wheelchairs to improve mobility and comfort. Therefore, the increase in the elderly population is expected to become a driving force for the wheelchair market in China and Japan.

• Continuous support from the government

To accelerate the development of medical devices and technology products, the Ministry of Science and Technology of China has issued the '13th Five-Year Plan for Medical Device Technology Innovation', encouraging domestic enterprises to develop various high-end and reliable medical devices suitable for the public, including wheelchairs. This includes transforming traditional equipment into intelligent devices through integrated innovative solutions, such as touchpad control, enhanced steering performance, and advanced suspension systems for wheelchairs. In addition, the State Council of China issued a new 'Regulations on the Construction of Barrier-Free Environments' in 2012, aiming to create barrier-free environments and ensure that people with disabilities participate equally in Chinese social life.

In Japan, the government aims to increase the mobility of wheelchair users by promoting facilities and vehicles suitable for wheelchairs, thereby enhancing their accessibility. In addition, the Japanese government provides subsidies for medical equipment, including wheelchair subsidies, for persons with disabilities. With advancements in wheelchair design and the establishment of barrier-free public infrastructure in society, physically disabled individuals are willing to use wheelchairs in public places, which may in turn contribute to the growth of the Chinese wheelchair market.

• Strong demand from downstream medical institutions

In addition to people with physical disabilities and the elderly, wheelchairs are widely used in hospitals and medical institutions. According to data from the National Bureau of Statistics, the number of medical institutions increased by 1.0% annually at a compound rate from about 9.834 million in 2016 to about 1.023 million in 2020, and total healthcare expenditures rose from about $659 billion in 2016 to about $1059.8 billion in 2020. As the Chinese government has been actively making necessary investments, allowing more people to access healthcare services and providing better medical care for patients, it is expected that medical institutions will provide more medical equipment and supplies, including wheelchairs. Therefore, the demand from downstream medical institutions will be conducive to the growth of the Chinese wheelchair market.

In addition, according to data from Japan's Ministry of Health, Labour and Welfare, there were more than 110,000 medical institutions in Japan in 2019. The large number of medical institutions requires a substantial amount of medical equipment and supplies, such as wheelchairs, which has supported the growth of Japan's wheelchair market.

• The disposable income of Chinese residents has been continuously increasing

According to data from the National Bureau of Statistics of China, the per capita disposable income of Chinese residents has increased from about $3,387.1 in 2016 to about $4,576.9 in 2020, with a compound annual growth rate of 7.8%. According to data from the Japanese Bureau of Statistics, the per capita household income has increased from $15,361.6 in 2015 to $19,512.0 in 2019, with a compound annual growth rate of 6.2%.

With the increase in disposable income in China and Japan, the living conditions of their residents have improved over the past five years, and they are more willing to spend more money on improving their living standards. Therefore, the improvement in living conditions has promoted the growth of the wheelchair market in China and Japan.

Shanwai Partners is the exclusive listing sponsor; Prime Number Capital serves as its underwriter; Marcum Asia CPAs LLP/Friedman LLP are its auditors; Dacheng and Hanbowen are its corporate China lawyers and US lawyers respectively; Kaufman & Canoles, P.C. are its US underwriter lawyers.

Frost & Sullivan, integrating 62 years of global consulting experience, has dedicated 25 years to serving the booming Chinese market. With a global perspective, we help clients accelerate their business growth and achieve benchmark positions in industry growth, innovation, and leadership. The healthcare industry is one of Frost & Sullivan's core areas of focus. Over the past 20-plus years, the Frost & Sullivan team has provided financing financial advisory, IPO industry advisory, strategic consulting, management consulting, and other services to hundreds of outstanding domestic and international biopharmaceutical, medical device, healthcare service, and internet healthcare companies. Successful listings include: Yisheng Biotech (NASDAQ:YS), Meiliyuan (2373.HK), Kangfeng Biotech (6922.HK), Bo'an Biotech (6955.HK), Sididi (1244.HK), Meihao Medical (1947.HK), Gaoshi Medical (2407.HK), Lepu Xin Tai (2291.HK), Jian Shi Technology (9877.HK), Health Yuan (JCARE.SW), Lepu Medical (LEPU.SW), Dingdang Health (9886.HK), BAIOSAUT (2315.HK), Zhiyun Health (9955.HK), MeinGene (6667.HK), Prenetics (PRE.NASDAQ), Yunkang Group (2325.HK), Ruike Biotech (2179.HK), Lepu Biotech (2157.HK), Clear Medical (1406.HK), Baxin An (2185.HK), Yonghe Medical (2279.HK), Kailai Ying (6821.HK), Beihai Kangcheng (1228.HK), Gusheng Tang (2273.HK), Yingpeng Technology (2251.HK), Clover Biotech (2197.HK), Minimally Invasive Robotics (2252.HK), Harmony Cayman (2256.HK), Kunbo Medical (2216.HK), Xianruida (6669.HK), Kangsheng Global (9960.HK), Yimaitong (2192.HK), Tengsheng Bovy (2137.HK), CanSino (2162.HK), Chaoyuju Eye Hospital (2219.HK), Guichuang Tongqiao (2190.HK), Huihuang Medicine (0013.HK), Cope Pharmaceutical (2171.HK), Zhaoke Ophthalmology (6622.HK), Nature Pharmacy (UPC.NASDAQ), Saiseng Pharmaceutical (6600.HK), Zhaoyan New Drugs (6127.HK), Novogene Health (6606.HK), ADAG Pharmaceuticals (ADAG.NASDAQ), Beikang Medical (2170.HK), Jianbaimiao Miao Miao (2161.HK), Minimally Invasive Xin Tong (2160.HK), Rui Li Medical Beauty (2135.HK), Jiake Pharmaceutical (1167.HK), HepB Pharmaceuticals (2142.HK), JD Health (6618.HK), Deqi Pharmaceutical (6996.HK), Rongchang Biotech (9995.HK), WuXi AppTec (2126.HK), XianSheng Pharmaceutical (2096.HK), Yunding Newray (1952.HK), Jiahe Biotech (6998.HK), Zai Ding Pharmaceuticals (9688.HK), Ocular Biotech (1477.HK), Yongtai Biotech (6978.HK), Haipu Pharmaceutical (9989.HK), Kuaipo Pharmaceutical (9939.HK), Peijia Medical (9996.HK), Kangfang Biotech (9926.HK), Nuo Cheng Jian Hua (9969.HK), Tian Jing Biotech (IMAB.NASDAQ), Kanglong Chemical (3759.HK), China Antibody (3681.HK), Dongyao Pharmaceutical (1875.HK), Yasheng Medicine (6855.HK), Fuhong Hanlin (2696.HK), Hansoh Pharmaceutical (3692.HK), Mabot Pharmaceutical (2181.HK), Fangda Holdings (1521.HK), Via Biotech (1873.HK), CStone Pharmaceuticals (2616.HK), Junshi Biosciences (1877.HK), WuXi AppTec (2359.HK), Innovent Biologics (1801.HK), Hailun Medicine (2552.HK), BeiGene (6160.HK), Galle Therapeutics (1672.HK), WuXi AppTec (2269.HK), China Resources Medicine (3320.HK), Yacogen Scientific Research Pharmaceutical (2633.HK), Huihuang China Medicine (HCM.NASDAQ), Gencell Biotechnology (1548.HK), BBI Life Sciences (1035.HK), etc. In terms of the number of submitted projects, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong's healthcare IPO market, consistently ranking first in market share from 2018 to 2022.

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