The population issue has always been a hot topic in recent years and is also a top priority of proposals at the Two Sessions not long ago. What economic laws are behind the continuous decline in population in recent years? Who is troubled by whether to have children or not? Mr. Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China, was invited to appear on the Titanium Media program 'Helen's Financial Dinner'. Together with Mr. Sun Cheng, Content Director for East China at Titanium Media, and Mr. Jin Lun, Researcher at the Guangdong-Hong Kong-Macao Greater Bay Area Reform and Innovation Research Institute and financial columnist, they discussed this topic from two perspectives: the underlying reasons for the new low population and assisted reproductive methods.   Q: Since the birth of China's first 'test-tube baby' in 1988, human assisted reproductive technology has been widely applied and developed in our country for 30 years. It is believed that significant progress has been made over these years. Could you introduce some of the changes that have taken place over the years? And what are currently the more advanced medical methods of assisted reproduction? Mr. Mao Hua introduced that assisted reproductive technology, abbreviated as ATR (Assisted Reproductive Technology), refers to the use of medical assistance to enable infertile couples to conceive. Since the successful birth of China's first 'test-tube baby' in 1988, more and more infertile couples in China have conceived through assisted reproductive technology, which has developed into a routine treatment method for tens of thousands of infertile couples. In 1999, Chinese scientists conducted the first preimplantation genetic diagnosis at the First Affiliated Hospital of Sun Yat-sen University, and the following year, the first preimplantation genetic diagnosis (PGD) baby was born. With innovations in technology and methods, improvements in in vitro culture conditions and environment, and the refinement of controlled ovarian stimulation protocols, the pregnancy rate and live birth rate of ART have significantly increased. Since 1989, China has continuously improved its laws and regulations related to assisted reproduction, with strict industry access threshold standards. Although China's assisted reproductive technology started relatively late, it has developed rapidly. The level of its technology and derivative technologies is gradually aligning with the world standard and is gradually reaching international advanced levels. After more than 30 years of rapid development, China now has treated over 200,000 patients annually with assisted reproductive technology, becoming the world's leading country in this field. China's assisted reproductive technology is gradually maturing and has even reached a world-leading level in certain areas. On September 19, 2014, the world's first test-tube baby for single-gene genetic disease screening was born at Peking University Third Hospital using MALBAC genome amplification followed by high-throughput sequencing. Subsequent cord blood gene testing confirmed that the infant did not carry pathogenic loci. This marks that China's preimplantation genetic diagnosis technology has reached a world-leading level, and 'birth defects', as a major reproductive health challenge, have also been overcome. In recent years, with technological advancements, new assisted reproductive technologies have been able to better assist doctors in clinical diagnosis and provide patients with more feasible and high-quality treatment options. For example, Research on DNA Fragmentation Index Clear indicators for male infertility can help doctors decide whether to use ICSI treatment or conventional IVF treatment. Endometrial receptivity array detection technology The success rate of implanting fertilized eggs can be evaluated by molecular analysis of endometrial tissue, which helps optimize the chances of successful transplantation after in vitro fertilization. Technological progress promotes the healthy development of the assisted reproductive services industry. In February 2020, China's first preimplantation genetic testing (PGT-A) product for non-homologous chromosome aberrations was approved for market release. By the end of 2020, medical institutions offering human assisted reproductive technology services were operating in all provinces and cities across the country, continuously improving accessibility. Various assisted reproductive technologies have developed rapidly, with technical levels gradually improving and service capabilities continuously enhancing, bringing good news to many infertile couples and making important contributions to family harmony and social stability. Assisted reproductive technologies include two main categories: Artificial Insemination (AI) and In Vitro Fertilization and Embryo Transfer (IVF-ET) and their derivative techniques. In vitro fertilization with embryo transfer (IVF-ET) is the method used to produce babies through this technology. In addition, there are also some new technical approaches in experimental stages, such as whole-genome screening IVF-ET and stem cell babies. Assisted reproductive services mainly consist of the following different projects: artificial insemination, gamete transfer, and in vitro fertilization (IVF). Artificial insemination can be further divided into husband sperm artificial insemination (AIH) and donor sperm artificial insemination (AID). Gamete transfer mainly includes intracytoplasmic sperm injection (ICSI) and intrauterine gamete transfer (IUT). IVF is divided into three generations, each suitable for different patients. The currently more advanced assisted reproductive technology is the third-generation in vitro fertilization (IVF) technique. PGT (Preimplantation Genetic Testing), also known as third-generation in vitro fertilization technology, refers to the genetic testing and detection of chromosomal abnormalities before an embryo conceived through in vitro fertilization is implanted into the mother's uterus. PGT technology can be divided into preimplantation genetic diagnosis (abbreviated as PGD) and preimplantation genetic screening (abbreviated as PGS). Currently, PGT can block 263 single-gene genetic diseases such as thalassemia, deafness, and spinal muscular atrophy (SMA), preventing birth defects; at the same time, it can effectively eliminate embryos with chromosomal abnormalities for infertile couples due to chromosomal structural abnormalities (such as balanced translocation/Robertsonian translocation and microdeletions/repeats). This method can directly screen out problematic embryos, selecting those with normal genetic material for implantation into the uterus, thereby improving pregnancy rates, reducing miscarriage rates, and preventing the birth of children with single-gene diseases and chromosomal abnormalities.   Q: What are the upstream and downstream forms of assisted reproduction? Why is clinical testing, especially chromosome testing, receiving increasing attention, which is considered to have a significant impact on eugenics and healthy childbearing? A: 'The upstream of the assisted reproductive technology industry chain mainly includes reagents used before surgery, medications and instruments used during the assisted reproductive cycle, etc. The midstream mainly consists of pharmaceuticals, equipment agents, as well as some mobile and internet platforms. The downstream mainly comprises institutions that provide various assisted reproductive services to patients.' Mr. Mao Hua further explained that the upstream of the assisted reproductive industry includes suppliers of drugs, devices, and diagnostic reagents. The market scale for assisted reproductive medications is about one hundred billion yuan, including drugs for down-regulation, ovulation induction, ovulation stimulation, and luteal support. Among them, ovulation-stimulating drugs account for 60%, and luteal-supporting drugs account for 20%. The midstream of the industrial chain consists of assisted reproductive service institutions. Relying on the advantages of internet channels, these institutions have launched an online consultation APP for peripheral services related to assisted reproduction. Offline, they achieve precise customer acquisition through medical service entities and then direct them to downstream assisted reproductive medical service institutions, realizing a deep integration of 'Internet + assisted reproduction'. The downstream of the industry consists of assisted reproductive medical service institutions. The market concentration in the downstream is low, with a highly fragmented competitive landscape, and public medical institutions have a more obvious advantage. Preimplantation genetic testing (PGT) refers to the screening of embryo chromosomes before embryo transfer to eliminate embryos carrying genetic diseases and chromosomal abnormalities, thereby improving pregnancy outcomes. PGT technology includes the screening of non-identical chromosome pairs and the detection of embryos carrying certain known pathogenic genes. Depending on the purpose, PGT technologies are divided into preimplantation genetic testing for aneuploidy (PGT-A), preimplantation genetic testing for monogenic (PGT-M), and preimplantation genetic testing for chromosomal structural rearrangements (PGT-SR). According to research, up to 50% of early miscarriages are associated with aneuploidy of the embryo. Aneuploid embryos are difficult to implant, and even a small number that do implant often develop poorly. The incidence of chromosomal aneuploidy in embryos is related to the age of the pregnant woman, increasing with age. Homozygous embryos are more likely to implant and have better pregnancy outcomes. Therefore, the focus of evaluation has shifted from embryo morphology to chromosome aneuploidy screening. PGT-A can effectively increase the success rate of pregnancy by performing aneuploid screening on embryos. PGT-M (Preimplantation Genetic Testing for Males), which prevents the birth of male patients with X-linked recessive genetic diseases by selecting female embryos, has gained widespread clinical recognition for preventing single-gene genetic disorders with high incidence and mortality rates. PGT-M can use fluorescence in situ hybridization (FISH) technology to screen for balanced embryos, thereby preventing the transmission of abnormal chromosomes between two generations. The ultimate goal of PGT is to identify embryos with normal chromosomes, allowing for the implantation of healthy embryos back into the mother's womb, thereby greatly increasing the chances of pregnancy. This is especially beneficial for older women who have experienced multiple failed in vitro fertilization attempts and are at high risk of miscarriage. It can effectively prevent the occurrence of genetic diseases, while also avoiding potential harm from elective abortions and multiple abortions. It prevents physical and psychological trauma to pregnant women and their families due to the need to terminate pregnancy.   Q: Apart from China, what are the characteristics of assisted reproductive technologies worldwide? Mr. Mao Hua stated that the global assisted reproductive industry has shown a strong trend, mainly reflected in rapid technological updates, large-scale industry development, and rapid growth of cross-border assisted reproductive markets. Overseas assisted reproductive policies are mature with high penetration rates. 1) Overseas assisted reproductive technology is leading Compared with domestic services, most assisted reproductive technologies abroad have a leading edge. In terms of success rates, in vitro fertilization (IVF) in the United States is 1.6 times more effective than that in Thailand and 2.6 times more effective than IVF in China. According to the analysis report data from Frost & Sullivan, the average success rate of in vitro fertilization (IVF) at officially approved reproductive centers and infertility hospitals in China is 30%-40%, with a slightly higher success rate for younger individuals; whereas the average success rate of IVF in the United States is 70%-80%, ranking first in the world; in Thailand and Malaysia, the success rate is 60%-70%, second only to the United States. From the perspective of technological generations, most domestic hospitals are still operating on the first and second-generation in vitro fertilization (IVF) technologies. In contrast, countries such as the United States, Thailand, and Malaysia have maturely adopted the third-generation IVF PGD technology, which is considered a global top-tier technique. The third-generation IVF PGD technology abroad has been clinically used for over 20 years and leads China by more than a decade. It has an advantage in screening genetic diseases and chromosomal issues, capable of detecting up to 250 different genetic disorders. IVF cycles can be divided into multiple phases (2 days or 28 days), with precise dosages of ovulation-stimulating drugs that cause almost no side effects. Embryo transfer using blastocysts increases success rates even further. High-end laboratories abroad and experienced IVF experts ensure the success rate of IVF, along with personalized medical service management that provides one-on-one services from doctors. Therefore, in terms of laboratory level, embryologist technology, and doctor clinical experience, foreign IVF has more advantages. 2) Improvement of overseas assisted reproductive policies Foreign policies allow the commercialization of reproductive cells: In countries abroad such as the United States and the United Kingdom, assisted reproduction is mostly led by companies. In private clinics offering artificial insemination, commercial sperm are commonly used, and there are also cases where women sell their own eggs. Proportion of Recipients from the Same Donor: Most sperm banks abroad are commercial ones, and different private clinics have varying regulations on this ratio. It can range from 1:10 to 1:25 or even higher. In cases where the ratio is high, it allows for the maximum utilization of physiologically 'excellent' genes, thereby providing a certain guarantee for embryo quality. Foreign single women can adopt assisted reproduction: In countries such as the United States and the United Kingdom, single women and gay couples can also conceive children through assisted reproductive technology. Surrogacy abroad is legal: In countries such as the United States, the United Kingdom, and Australia, surrogacy is recognized as legal in multiple states, with relatively complete legal regulations and professional surrogacy intermediary agencies. Hong Kong in China also recognizes the legality of childbearing through surrogacy.   Q: What are the current domestic companies related to assisted reproduction? What characteristics do they exhibit? What is our current level of technology? A: 1) Upstream enterprises: Equipment consumables: Desheng Biotech, Beikang Medical, BGI Medical, Yingsheng Biotech, Berry Health, Bio-Ocean, Antu Biotech, Yikang Gene, Jiarong Renhe, Yahui Long Biotechnology Drugs: Merck Sharp & Dohme, Xianju Pharmaceutical, Lizhu Medicine, Jinsai Pharmaceutical 2) Midstream and downstream enterprises: Jinxin Reproductive Medicine, Aiview Medical, Med66 Medical, Tongce Medical The upstream multinational pharmaceutical companies in the assisted reproductive industry, such as Merck Serono and Merck Sharp & Dohme, have a clear competitive advantage. With the improvement of domestic R&D innovation levels and the enhancement of generic drug consistency evaluation, domestic pharmaceutical companies like Lizhu Group and Xianju Pharmaceutical will accelerate their penetration into high-end markets and speed up the process of domestic substitution. The production of assisted reproductive devices is mainly by foreign manufacturers, who almost monopolize the device market, such as Vitrolife and ORIGIO. China mainly produces auxiliary devices and consumables such as egg retrieval needles, embryo transfer catheters, and culture dishes. In the future, with the support and improvement of domestic assisted reproductive policies, and under the impetus of an environment that encourages domestic substitution, companies like Deshi (a manufacturer of chromosome testing equipment and auxiliary devices and consumables) are continuously deploying in the field of domestic assisted reproduction, reducing import dependence, and achieving domestic substitution will be an inevitable trend. The middle and lower reaches are assisted reproductive service institutions. The downstream market has a low concentration, highly fragmented competition, and public medical institutions have a clear advantage. Most assisted reproductive centers can provide basic assisted reproductive services, but there is a significant gap in high-end technology needs, indicating that there is room for substantial improvement in overall assisted reproductive center technology. Data from the National Health Commission show that as of June 30, 2020, there were 523 medical institutions approved to carry out human assisted reproduction, with private hospital assisted reproductive centers accounting for about 10%. According to statistics, 325 centers provide intrauterine insemination (IUI) with husband's sperm, 83 provide donor insemination, 398 provide conventional IVF-ET, 399 provide intracytoplasmic sperm injection (ICSI), and 71 provide preimplantation genetic diagnosis (PGD). Among these, 45 assisted reproductive medical institutions offer all five technologies, accounting for 8.6% of the total national number.   Q: We have noticed that companies related to assisted reproduction are particularly favored by capital in terms of financing. What is your view on these startups? What are their future development directions? A: With the continuous development of the social economy and the accelerating pace of life and work, fertility issues have become one of the urgent problems that need to be addressed in China and around the world. In recent years, the number of infertile couples in China has been increasing year by year, reaching 49.9 million in 2019, with a compound annual growth rate of 3.2% from 2015 to 2019. According to Frost & Sullivan's forecast, by 2024, this number will steadily grow to 52.6 million, with a compound annual growth rate of 1.1% from 2019 to 2024. The continuous postponement of marriage and childbearing age, coupled with the increasing population of elderly pregnant women driven by the three-child policy, and the urgent need for improved birth outcomes due to neonatal defects, have made the assisted reproductive industry one of the potential markets with the fastest demand growth and expansion in China's healthcare services sector. As an emerging market for assisted reproduction, China has maintained a high growth rate in recent years. The Chinese assisted reproductive service market has increased from 162 billion yuan in 2015 to 282 billion yuan in 2019, on par with the US market, with a compound annual growth rate of 14.9%. With the increasing demand for assisted reproductive services, the Chinese market will continue to expand rapidly, expected to reach 681 billion yuan by 2024, with a compound annual growth rate of 19.3%. In China, assisted reproduction has high barriers, strong premium pricing power, and huge potential for market penetration. These characteristics make it an important reason why the assisted reproduction sector attracts capital. Currently, Beijing has taken the lead, ushering assisted reproductive technology services from an era of 'no medical coverage' into one where they are 'paid for by medical insurance'. . With the gradual maturity of assisted reproductive technology and national policy support for the industry, the assisted reproductive sector is about to enter a strategic opportunity period. In any case, the assisted reproductive service market is an untapped blue ocean. Nowadays, with the capitalization of some leading enterprises and the entry of more capital providers, start-up private assisted reproductive institutions are expected to welcome a new spring, while large assisted reproductive medical groups will gradually form and stand out. This market, worth hundreds of billions, will also experience accelerated explosive growth. China's assisted reproductive industry is in the growth phase, and future market demand is promising. The innovation of assisted reproductive technologies through multidisciplinary collaboration will become the core driving force for the development of the industry. 1) Development of private assisted reproductive institutions At present, the assisted reproductive service industry in China is still dominated by public medical institutions. Policies encourage the utilization of social resources for the operation of medical institutions, such as the 'Implementation Opinions on Promoting the Accelerated Development of Private Medical Institutions,' and the opening up of relevant approval certificates will lead to rapid development of private assisted reproductive institutions. In addition, private assisted reproductive medical institutions have the advantages of high flexibility and high service quality. With the increasingly clear requirements from the Ministry of Health for assisted reproductive hospitals and the expansion of market space, private assisted reproductive hospitals are increasingly integrating with the capital side, and downstream ports of the industry are gradually opening up, highlighting investment value. In the near future, more patients will tend to choose private assisted reproductive centers for assisted reproductive treatment, which will promote the rapid development of private assisted reproductive centers. 2) Chain operation In China, due to the reproducibility of assisted reproductive services and a streamlined professional structure, there is a greater preference for development towards medical chains. The chain operation of assisted reproductive centers can share medical resources, brand images, improve overall operational efficiency, and promote coordinated development among various assisted reproductive institutions. 3) Continuously advancing technological progress With the acceleration of globalization, assisted reproductive centers will have more opportunities to learn advanced assisted reproductive technologies and cooperate with outstanding overseas medical institutions. In turn, this will also enhance the technical level of ART centers. At the same time, third-generation technologies such as PGD and PGS are becoming increasingly popular in China, helping couples achieve better birth outcomes. The continuous improvement in technical levels will promote the development of the assisted reproductive service industry.

Recently, the 5th Public Welfare Event Grand Ceremony 2022 was grandly held at the Hainan Boao • Asia Forum International Conference Center. The Public Welfare Event Grand Ceremony was jointly initiated by the Zhongshi Caifeng Network • Frost & Sullivan (Frost & Sullivan, abbreviated as "Frost & Sullivan") won two major awards at this year's public welfare grand ceremony: the "Grand Health Brand Value Communication Award" and the "2021 Public Welfare Responsible Brand Award".   Grand Health Brand Value Communication Award Frost & Sullivan, integrating over 60 years of global consulting experience, has been serving the booming Chinese market with dedication for 24 years. With a global perspective, it helps clients accelerate their business growth and achieve industry-leading benchmarks in terms of growth, innovation, and technology. The healthcare industry is one of Frost & Sullivan's core areas of focus. Over the past seventeen years, the Frost & Sullivan healthcare team has provided financing financial advisory, IPO industry advisory, strategic consulting, management consulting, and other services to hundreds of outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare companies. Successful listings include: Clear Medical, Bexcellence Biologics, Yonghe Medical, Kailaiying, Beihai Kangcheng, Gushengtang, Yingpeng Technology, Clover Biotech, Minimally Invasive Robotics, Xianruida, Yimaitong, Chaopu Eye Hospital, Huahuang Medicine, Nature Pharmaceuticals, Novogene Health, Tianyan Pharmaceuticals, Minimally Invasive Xin Tong, Rui Li Medical Beauty, JD Health, Ocular Vision, Tianjing Biology, China Antibody, WuXi AppTec, Innovent Biologics, BeiGene, CR Pharma, BBI Life Sciences, and hundreds of other related enterprises in the healthcare sector. According to the number of filings, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong healthcare IPOs, consistently ranking first in market share from 2018 to 2021. Since the listing of the first batch of companies on the Sci-tech Innovation Board in July 2019, Frost & Sullivan reports have also been widely cited in the prospectuses of leading Sci-tech Innovation Board listed companies in the industry, including: Heyuan Biotech, Mawei Biotech, Yahong Medicine, Jiahe Meikang, Dizhe Medicine, Novogene, Chengda Biology, Huaxi Biology, Junshi Biology, Zijing Pharmaceutical, Bai'ao Tai, and Shenzhou Cells. It is considered one of the most powerful, professional, and influential industry research institutions in the sector. Due to the pandemic, the Third Grand Health Industry Summit Forum has been postponed until the same period as the Fifth Public Welfare Event. This summit forum is themed 'Leading the Development of the Health Industry and Displaying Innovative Health Products', aiming to build upon past successful experiences and strive to become the largest and most influential health brand in China's health history. The awarding of the 'Great Health Brand Value Communication Award' this time is a full affirmation by the industry of Frost & Sullivan's outstanding achievements in the field of great health. In the future, Frost & Sullivan hopes to continue working with enterprises to understand industry trends, seize development opportunities, jointly promote innovation and upgrading of China's great health industry, and build a healthy future.   2021 Public Welfare Responsibility Brand Award As a globally renowned growth consulting firm, Frost & Sullivan has been dedicated to its commitment to growth and its contribution to society over the past 60-plus years. Therefore, Frost & Sullivan has always regarded engaging in public welfare as an important part of its social responsibility. Pay attention to the growth of small and medium-sized enterprises, and jointly launch the Annual Public Welfare Project Pilot Program In order to provide startup and small and medium-sized enterprises (SMEs) with essential professional services and assistance for entrepreneurship, empower them in transformation and upgrading, enhance internal efficiency and strategic development, enabling them to quickly establish advantages, LeadLeo Research Institute under Frost & Sullivan launched the 'Pilot/Navigator Program' in 2021, with Frost & Sullivan serving as the Chief Growth Advisor for the program. As of the end of 2021, the 'Pilot/Navigator Program' has helped nearly a hundred SMEs complete business research, provided value communication services, and assisted these SMEs in connecting with parks and capital, contributing to their comprehensive growth. A sense of responsibility towards the country and family, to help each other and work together through thick and thin In July 2021, Henan Province experienced extreme heavy rainfall, causing severe disaster conditions. Frost & Sullivan's Greater China region has been closely monitoring the progress of frontline relief efforts and donated RMB 200,000 to Henan through the Zhengzhou Charity Federation to help alleviate poverty and difficulties in the affected areas, working together to overcome challenges. Innovation proposes sustainable cultural knowledge-based poverty alleviation On November 15, 2021, Frost & Sullivan will donate the first batch of 300 sets of sportswear, 150 schoolbags, and 150 pairs of padded cotton shoes to Kaxiang Primary School in Shenzha County through a charitable organization. The aim is to assist teenagers in remote areas in their learning and growth, help them change their fate through cultural knowledge, and bring a bit of warmth and good luck to children in high-altitude and cold regions. Dr. Wang Xin, Global Partner and President of Frost & Sullivan Greater China, who was awarded the '2021 Public Welfare Responsibility Brand Award', stated: 'The corporate mission of Frost & Sullivan is to make the world a better place through growth; corporate growth and social responsibility complement each other and are both our foundation.' In the future, Frost & Sullivan will remain true to its original aspiration, keep the growth mission in mind, create value through growth, and give back to society with responsibility.

Frost & Sullivan insights The intensification of the Russia-Ukraine conflict has significantly driven up traditional oil and gas (petroleum, natural gas) prices. The uncertainty about the direction of the conflict adds many risks to subsequent traditional oil and gas supply. Moreover, Europe has already experienced an energy crisis due to extreme weather and other factors. In the past year, electricity prices in Europe rose by 790% compared to the beginning of the year; UK NBP natural gas futures increased by 700% compared to the beginning of the year. Coupled with the turmoil in the Russia-Ukraine situation, natural gas supply has become even more variable. Under the current situation, will the Russia-Ukraine crisis accelerate the process of new energy power generation in Europe, or even globally? With onshore wind power entering parity, how do you view this year's onshore wind sector? Looking at the whole year, which link of the photovoltaic industry chain is more promising? Xu Biao and Zhang Zhiwei, Executive Directors of Frost & Sullivan's Greater China region, recently spoke with Caixin about the impact of accelerating the new energy process in Europe. Caixin The intensification of the Russia-Ukraine conflict has significantly driven up traditional oil and gas (petroleum, natural gas) prices. The uncertainty about the direction of the conflict adds many risks to future traditional oil and gas supply. Prior to this, Europe had already experienced an energy crisis due to extreme weather, with electricity prices in the region rising by 790% compared to the beginning of the year; UK NBP natural gas futures have risen by 700% compared to the beginning of the year. Coupled with the disturbances caused by the Russia-Ukraine situation, natural gas supply is further complicated. Affected by this, some countries such as Germany have proposed new legislative drafts, aiming to advance the goal of achieving 100% renewable energy generation to 2035, 15 years ahead of the previous target.   Q Under the current situation, will the Russia-Ukraine crisis accelerate the process of new energy power generation in Europe, or even globally? If German legislation is officially implemented, it will greatly drive demand for wind and photovoltaic power. What impact will this have on China's wind, photovoltaic, and energy storage industries? Which links in China's new energy industry chain will benefit significantly? Which targets are more advantageous? Xu Biao, Executive Director of Frost & Sullivan Greater China Xu Biao, Executive Director of Frost & Sullivan Greater China, said: The Russia-Ukraine crisis has had a profound impact on the new energy market in Europe and even globally, and it is expected to have far-reaching effects in the medium to long term. Just as the oil crises that occurred three times between 1973 and 1990, centered around the Middle East, were followed by increased control over strategic resources such as oil, along with significant efforts to develop new energy industries, enhance energy independence, and ensure energy security.   As Germany plans to phase out nuclear power completely in 2022 and coal-fired power in 2038, if the corresponding amendments to the Renewable Energy Act (EEG) are officially implemented, the process of wind and solar power becoming the core support for Germany's energy independence will further accelerate. Germany has a high import dependence on Russian natural gas, with more than half of its natural gas coming from Russia. Although Germany will still face many challenges in reducing its energy dependence, the German bill will not only promote the development of wind and photovoltaic power in the country but also have a positive impact on the development of new energy sources such as wind and photovoltaic power in various countries. As the world's largest wind and photovoltaic market, China possesses the most complete wind and photovoltaic industrial chain. Against the backdrop of accelerating development in the wind and photovoltaic industries, China will receive significant impetus.   In addition, the development of distributed energy systems is also an important direction for new energy development. Especially in Europe where electricity and energy prices remain high, distributed energy systems represented by rooftop solar systems are developing rapidly. The development of distributed energy systems cannot be separated from the development of energy storage systems. As the world's largest producer of lithium batteries, China plays a crucial role in supplying lithium battery energy storage systems. In the global process of new energy development, Leading enterprises in the industrial chain with price advantages, scale advantages, and overseas business layout will benefit more significantly.   Q Domestically, green power (wind and photovoltaic) has been continuously adjusting since November 2021. What is the core contradiction? Recently, photovoltaics have rebounded somewhat, while wind power performance has been slightly worse. So, what the market is currently focusing on is whether this rebound in photovoltaics is sustainable. From an industry perspective, prices in the photovoltaic supply chain have risen consecutively recently. This suggests that terminal installation demand has warmed up, but under the pressure of rising upstream prices, will battery cell and module profits also be pressured in the short term? Looking at the whole year, which segment of the photovoltaic supply chain is more promising? Zhang Zhiwei, Executive Director of Frost & Sullivan Greater China Zhang Zhiwei, Executive Director of Frost & Sullivan Greater China, said : Over the past year, the price of silicon materials has risen beyond expectations, with an overall increase of over 160%, and at its highest, it exceeded 200%. Excessive raw material prices have continuously pushed up the prices of silicon wafers and battery modules, severely damaging downstream terminal installations. Some terminal enterprises cannot afford the high costs, and many installation and commissioning plans have been postponed to the next year. Looking at the annual installed capacity, the industry generally predicts that the installed capacity in 2021 can reach 55-65 GW. However, due to reasons such as price increases and delayed issuance of indicators, expectations are basically reduced by about 10 GW in November and December. In fact, the photovoltaic installed capacity in 2021 was 53 GW. Under the significant policy benefits, the unexpectedly poor performance of photovoltaic installations has clearly triggered market concerns. Especially given that the industry's valuation had already increased significantly earlier on, the market is relatively sensitive. Coupled with negative news from international markets such as the US proposal to extend tariffs on Chinese photovoltaic products in November last year, domestic funds have become more cautious about the photovoltaic market. It can be said that stimulated by both negative domestic and international news, the photovoltaic industry underwent a significant adjustment in the secondary market starting from November last year.   After the end of this year, downstream terminals began to release inventory, including both new demand and projects that were postponed from last year to this year. Leading market companies started to raise silicon wafer prices, which were affected by rising upstream silicon material costs but also fully reflected the continuous improvement in downstream battery and module production, with terminal demand beginning to recover. Since mid-February, market expectations have gradually improved, bringing a small rebound to the photovoltaic market. It is expected that the photovoltaic installed capacity this year will reach 80 GW, and this rebound will also last for some time. However, the rapid changes in the international situation also bring a hint of uncertainty to the overall market.   Looking at the overall industrial chain, I am quite optimistic about the silicon material and silicon wafer segments. Regarding silicon materials, although production capacity is gradually being released, the supply remains tight this year due to rapidly growing demand. For the silicon wafer segment, it is appropriate to transfer the upward pressure on upstream silicon material prices to downstream components and battery cells. However, the component segment needs to deliver to end-users and must maintain price stability; moreover, with the price of downstream component orders remaining stable, there is some resistance to rising battery prices, which will bear more cost pressure. Additionally, it is important to note that Although the photovoltaic industry has broad prospects, it is also necessary to be cautious about the risk of overcapacity under the scenario where all parties intensify their efforts to expand production.   Q Onshore wind power has entered parity, how should we view this year's onshore wind sector? Regarding offshore wind, since parity is about to be achieved in 2022, cost reduction in the offshore wind industry chain cannot be accomplished overnight. In the short term, if the costs of offshore wind projects remain high, offshore wind investors may face the risk of not making a profit, which will greatly weaken their investment willingness. Additionally, in 2021, downstream wind farms were busy rushing to install turbines, leading to fewer tendering for offshore wind projects in 2021 and thus affecting the construction of offshore wind projects in 2022. Against this backdrop, how will it impact the market trend of the offshore wind sector in 2022? Considering domestic supply and demand as well as the Russia-Ukraine situation, how should we view the medium- and long-term trends of offshore and onshore wind?   Xu Biao, Executive Director of Frost & Sullivan Greater China, said: 2021 was the first year of grid parity for onshore wind power. Although the new installed capacity of onshore wind power has significantly decreased compared to the rush installation boom in 2020, it still grew by nearly 20% compared to 2019. Under the guidance of the 'dual carbon goals,' national and local governments have put forward clear new tasks for wind power development. It is expected that the onshore wind power sector will operate in an environment of high prosperity in 2022. The decline in unit prices is an important driving force for wind power to enter a era of parity and low prices. Changes in wind turbine prices in 2022 will still be a focal point of market attention.   The last year of the national subsidy for offshore wind power in 2021 is followed by a three-year period of grid parity transition for offshore wind power. At present, the offshore wind power market in 2022 is mainly based on existing orders, with limited new resources released by local governments. At present, there is still significant cost reduction potential for offshore wind power. 2022 is a critical year for adjustments in the offshore wind sector.   Against the backdrop that domestic wind power is gradually entering an era of parity and low prices, coupled with rising raw material costs, the profits of the wind power industry chain are under pressure. In addition, affected by the Russia-Ukraine situation, global demand for new energy is accelerating expansion, and there is still significant potential for overseas exports from China's wind power industry. In the medium to long term, the development of China's wind power market will gradually stabilize, and there are relatively good prospects and incentives for the expansion of China's wind power industry into overseas markets.

Insights from Frost & Sullivan On February 18th, multiple departments including the National Development and Reform Commission jointly issued the 'Notice on Printing and Distributing Several Policies to Promote the Stable Growth of Industrial Economy', proposing to accelerate the implementation of special actions for big data center construction, carry out the 'East Data West Computing' project, and speed up the construction of eight national-level data center hubs in the Yangtze River Delta, Beijing-Tianjin-Hebei region, and Guangdong-Hong Kong-Macao Greater Bay Area. Behind the 'East Data West Computing' is the upgrade of grid computing power. What changes are predicted for grid computing power? Some experts believe that for the power transportation required by 'East Data West Computing', the capacity of UHV will need to increase by nearly 70% based on the original plan. It seems that this plan may be implemented ahead of schedule. What's your opinion on this? In addition to grid computing power and UHV construction, what other related transformations will the grid undergo for 'East Data West Computing'? Mr. Xu Biao, Executive Director of Frost & Sullivan's Greater China Region, was interviewed by China Energy News to discuss what impacts 'East Data West Computing' will have on the grid structure. China Energy News On February 18th, multiple departments including the National Development and Reform Commission jointly issued the 'Notice on Printing and Distributing Several Policies to Promote the Stable Growth of Industrial Economy', proposing to accelerate the implementation of special actions for big data center construction and the 'East Data West Computing' project.   It is reported that China will accelerate the construction of eight national-level data center hubs in the Yangtze River Delta, Beijing-Tianjin-Hebei region, and Guangdong-Hong Kong-Macao Greater Bay Area, and has planned ten national data center clusters. 'East Data West Computing' is considered the latest infrastructure project under China's new era pattern after the South-to-North Water Diversion Project, the West-East Gas Pipeline Project, and the West-East Power Transmission Project.   Industry insiders said that within these eight hubs and ten clusters, there is a uniform distribution from east to west, with most areas being the first or second batch of pilot areas for spot electricity settlement. As the marketization of electricity progresses to the real-time spot settlement stage, the consumption of new energy, especially cross-provincial and cross-regional resource dispatching, will rely entirely on grid computing power.   Helping to Upgrade Grid Computing Power Shao Junsong, co-founder of Jiangxing Intelligence, said, 'East Data West Computing' involves handing over the data computing needs of the eastern coastal regions of China to inland data centers for processing. However, some data calculations with strong real-time requirements still need to be processed near where the data is generated. Therefore, in addition to large data centers in the western regions, the state has also planned large data centers in the Yangtze River Delta, Beijing-Tianjin-Hebei region, and Guangdong-Hong Kong-Macao Greater Bay Area.   'On this basis, various industry data will be concentrated in these big data centers. Grid data centers will also expand rapidly with the construction of national-level data center hubs, making it more convenient to aggregate business data across different departments of the grid. The improvement in computing power will also guide the manifestation of data value, shifting from traditional departmental business data mining to multi-dimensional analysis across departments and even industries, thereby generating more social and economic value.'   Mr. Xu Biao, Executive Director of Frost & Sullivan's Greater China Region, told reporters that against the backdrop of the launch of this new era national super infrastructure project 'East Data West Computing', how to fully integrate existing grid infrastructure with new digital infrastructure to create a new type of integrated infrastructure that outputs electricity and computing power is key.   He believes that in the future, while ensuring the transmission of electricity, the grid will integrate more fully to support the development needs of computing power. Not only will the computing power of the grid be significantly increased to meet the needs of 'East Data West Computing', but also functions such as distributed production and consumption of electricity, and long-distance large-scale power transmission can load computing resources simultaneously, achieving resource reuse and optimization in space and time. The core hub function of the grid will be further enriched in the era of 'electricity + computing power', and utilization models such as electricity + 5G and external services for power data centers can fully respond to users' dual needs for electricity and computing power, reconstructing the function and value of energy infrastructure.   Triggering a New Round of Grid Investment In fact, computing power is like electricity in the industrial era, or water conservancy in the agricultural era, and is the core infrastructure for the development of the national economy in the information age. After more than 20 years of development through 'West-East Power Transmission', China has established a grid with the strongest global energy allocation capacity, the most high-voltage transmission lines, and the highest level of safe operation, and is moving forward towards the comprehensive construction of an energy internet.   Shao Junsong proposed that among the eight planned national-level data center hubs, three require electric power input, such as seasonal electric power demand in Chengdu and Chongqing. The power consumption of these data centers will inevitably lead to new demands for power supply capacity, triggering a round of grid investment around data centers.   He believes that under the new power system mainly composed of new energy, given the main layout locations of new energy power stations, the focus of grid investment around data centers must be on the construction of cross-regional transmission grids. UHV will help form point-to-point electric power transmission, which is conducive to maximizing grid investment returns. Therefore, the construction of UHV around national-level data center hubs will inevitably accelerate synchronously with data center construction, forming an interactive and linked effect.   Mr. Xu Biao said that from the historical process of China's infrastructure construction, appropriate advancement is an important approach to high-quality development. Against the backdrop of the country's deep implementation of the digital economy development strategy, both the digital economy and new energy power are key infrastructure areas for appropriate advancement. As an important support for 'fine computing in East Data', UHV, combined with the dual missions of the digital economy and new energy power, is one of the main battlefields for appropriate advance infrastructure construction. It is expected that the construction plans during the '14th Five-Year Plan' period will be accelerated, and to meet the power transportation needs of 'East Data West Computing', UHV needs to increase by nearly 70% based on the original plan.   Promoting Multiple Transformations of the Grid As is well known, data centers are major electricity consumers. Mr. Shao Junsong believes that achieving 'fine computing in East Data' under the background of building a new power system mainly composed of new energy will inevitably trigger multiple transformations of the grid.   In Shao Junsong's view, first, the spatial transfer of data center types of load will be conducive to the consumption of clean energy in the western regions; second, the construction of supporting renewable energy power stations and energy storage stations around data centers will inevitably trigger a new round of power infrastructure construction; finally, online data center loads have the characteristic of spatial transfer, while offline loads have the characteristic of temporal transfer. Both types of loads can participate in the demand response market. Data center loads also have short-term and medium- to long-term predictability, and can profit from various aspects such as the electricity energy market, capacity market, demand response market, and auxiliary service market. They will inevitably participate as an important force in power market transactions, helping to build a new power system mainly composed of new energy.   Mr. Xu Biao said that with the continuous advancement of the 'East Data West Computing' project and the accelerated construction of eight national-level data center hubs, the electricity demand for data centers will increase significantly. The local consumption scale of renewable energy such as wind and photovoltaic in western provinces will be greatly increased, which will help improve the proportion of green energy used in data centers and contribute to achieving carbon peak and carbon neutrality goals.   Mr. Xu Biao believes that with the continuous advancement of power marketization and gradual real-time spot settlement, the solution to key issues such as new energy consumption and cross-provincial and cross-regional resource dispatching depends on the development of grid computing power. The normalization of power spot operation poses higher requirements for the computing power and system for electricity settlement. 'The smooth progress of the 'East Data West Computing' project cannot be separated from the good market environment shaped by the power marketization reform with the grid as its core foundation.' *This article is reprinted from China Energy News, authored by Han Yifei, with the original title 'The Hot 'East Data West Computing', What Does It Mean for the Grid Structure?'

Frost & Sullivan insights On March 1st, the FDA officially approved Legend Biologics' CAR-T product, which is the first CAR-T therapy in China to receive FDA approval. Affected by this news, Legend Biologics soared by 11.16% after the market closed, with a market value of $6.051 billion. Legendary Biologics CEO Huang Ying also publicly stated that they have established a local team, including sales staff, nurse educators, and Medical Social Liaisonists (MSL), with plans to start treatment at the first wave of hospitals on the day of approval. They will then expand to other treatment centers in the coming months, with initial production capacity supplied by factories in New Jersey, USA. As of now, the US FDA has approved six CAR-T cell therapies for market launch. Analysts from Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') were interviewed by Economic Observer Network to discuss whether Chinese pharmaceutical companies can refer to their overseas market expansion strategies after the approval of the legendary biotech company's CAR-T therapy.   Economic Observer Network The FDA has officially approved Legend Biologics' CAR-T product, which is the first CAR-T therapy in China to receive FDA approval. This therapy uses genetic engineering technology to modify T cells in vitro, expand them, and then reinfuse these cells into the patient's body to directly kill cancer cells.   Affected by this news, Legend Biotech soared 11.16% after the market closed, with a market value of $6.051 billion. Its staff told Economic Observer that preparations have been made in terms of production capacity, and production bases compliant with GMP standards have been established in New Jersey and Nanjing, USA. In November last year, the second phase of Legend Biotech's industrialization project officially started in Nanjing, also to ensure supply of production capacity. The staff also introduced that this FDA clearance process was advanced by the clinical team of Legend Biologics in the United States and its partner, Johnson & Johnson's team. It is understood that the CAR-T product was initially developed independently by Legend Biologics. In 2018, Legend Biologics reached a cooperation agreement with Johnson & Johnson to jointly develop it, with the Chinese rights held by both parties divided equally at 70:30, and the overseas rights divided equally at 50:50. As of now, Johnson & Johnson has paid Legend Biologics a prepayment of $350 million and milestone payments of $250 million.   According to Scott White, president of Johnson & Johnson North America's Pharmaceutical Business Group, the therapy is priced at $465,000. In the US market, Legend Biologics and Janssen are jointly conducting marketing efforts, with Legend Biologics responsible for smaller but more targeted sales teams targeting hospital markets, while Janssen's team will focus on a broader community. As of now, the US FDA has approved six CAR-T cell therapies for market launch. After Legend Biologics' product was approved for marketing, its direct competitor is Bristol-Myers Squibb's CAR-T product targeting the same target. In March last year, Bristol-Myers Squibb's product was approved for marketing, leading Legend Biologics by nearly a year. Its pricing is $419,500, slightly lower than Legend Biologics', with sales last year amounting to $1640 million.   Analysts from Frost & Sullivan told the Economic Observer that although Legend Biologics' product pricing is slightly higher than those of Bristol-Myers Squibb, it is still within a reasonable range. Moreover, multiple myeloma is considered a blue ocean in the niche market segment. In 2020, there were 450,000 patients globally with this indication, and the efficacy of traditional therapies is far inferior to CAR-T therapy. Currently, only two have been approved, while other similar products are progressing relatively slowly. The market potential is sufficient to support this, and Legend Biologics has also found a partnership with Janssen, which is very advantageous.   At the same time, the approval of Legend Biologics' CAR-T therapy indicates that the FDA's doors are still open. Considering the previous rejection of Innovent Biologics' PD-1 drug for overseas markets, she believes that for pharmaceutical companies seeking to expand into overseas markets, Legend Biologics' approach is worth considering. Finding a relatively innovative direction at the technical level rather than highly homogenized targets like PD-1, choosing global multi-center trials clinically, and simultaneously considering cooperation with international big pharmaceutical companies to advance research and development and commercialization may be a relatively feasible path for going global. *This article is reprinted from 'Economic Observer Network', authored by Yu Shiqi, with the original title 'The Legendary Biotech CAR-T Therapy Approves in the US, and Does It Look Like the FDA's Doors That Were About to 'Close' Are Reopening?'.

2022 Annual Frost & Sullivan VIP Appreciation Dinner 2022 Annual Frost & Sullivan VIP Appreciation Dinner 30s Cut quickly "Live up to our ideals in the springtime and jointly create a prosperous future."   2022 year 2 month 28 day   Frost & Sullivan   2022 Annual VIP Appreciation Party   Grandly held at the Shanghai Bulgari Hotel   Hundreds of people from Frost & Sullivan gathered together,    Celebrate together At the beginning of the event, Dr. Wang Xin, Global Partner and President of Frost & Sullivan Greater China, and Mr. Wang Chenhui, Managing Partner and Executive Vice President of Frost & Sullivan Greater China, added the finishing touch to the occasion with their presence. Subsequently, all Frost & Sullivan employees raised their glasses in celebration, officially kicking off the thank-you dinner. At the meeting, all employees listened to speeches delivered by Dr. Wang Xin, Global Partner and President of Frost & Sullivan Greater China; Mr. Wang Chenhui, Managing Partner and Executive Vice President of Frost & Sullivan Greater China; Mr. Lu Jing, Partner and Managing Director of Frost & Sullivan Greater China; Mr. Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China; and Mr. Yang Xiaocheng, Partner and Managing Director of Frost & Sullivan Greater China, who respectively summarized Frost & Sullivan's 2021 Year, looking forward together 2022 The new year at Frost & Sullivan. As a global growth consulting firm, Frost & Sullivan brings together the world. 60 Years of consulting experience 24 We strive to serve the booming Chinese market wholeheartedly, and with a global perspective, help our clients accelerate their business growth, achieving industry-leading benchmarks in terms of growth, innovation, and leadership. Frost & Sullivan, leveraging its rich expertise in the professional market and consulting tools, has helped a large number of clients achieve their strategic goals, including those globally. 1000 Strong companies, emerging enterprises, and investment institutions.   Unite our hearts and efforts to achieve greater success Frost & Sullivan is deeply involved in global and Chinese capital markets, providing comprehensive investment and financing services for enterprises. In recent years, Frost & Sullivan China has successfully helped nearly a thousand domestic and foreign companies list and raise funds on major global capital markets, serving over ten thousand listed companies in total. 2021 In 2021, Frost & Sullivan continued its outstanding performance, assisting companies including SenseTime Technology, Quanjing Holdings, BGI Bio-Tech Group, Huarong Medicine, Yimaitong, Minimally Invasive Medical Robotics, Yingtong Technology, Yonghe Medical, Kailaiying, Baideli, and Jili Holdings. YesAsia Nearly a hundred companies, including Youran Animal Husbandry, have successfully listed in Hong Kong or overseas. 2014 till 2021 In the year, Frost & Sullivan retained its leading position as the market research advisor with the largest share in the Chinese corporate listings in Hong Kong for eight consecutive years. Lead innovation and transform and upgrade Frost & Sullivan seizes the opportunities of the times, is enterprising, transforms and upgrades, and continuously improves service quality. From selecting high-quality enterprises to providing professional knowledge, from corporate growth consulting to initial public offerings, from capital connection to market value management, on the basis of serving Hong Kong and overseas capital and financial markets, Frost & Sullivan further leverages its global experience in the field of technology innovation to create a distinctive A The Equity and Sci-Tech Innovation Board Service Platform is considered the industry's most powerful, professional, and influential research institution. Keep growing, and steadily move towards the horizon from 1961 Born in New York in 70 The offices of the Era Company are located across Europe, to 80 Over the years, Frost & Sullivan has become a global leader in industry database publishing, and now 1998 Since its official entry into the Chinese market in 2014, Frost & Sullivan has forged ahead through thick and thin. 2021 The year is the anniversary of the establishment of Frost & Sullivan. 60 On its 60th anniversary, Frost & Sullivan has followed the pace of global development, never forgetting its original aspiration of "leading growth", striving for excellence, continuously delving into and deciphering the "codes" of industry development to help enterprises explore new possibilities for growth. The six decades have seen the blossoming of spring and the fruition of autumn, as well as sixty glorious years. The steady and rapid development of Frost & Sullivan is inseparable from the dedication of every employee. To demonstrate the power of role models, at this annual meeting, Frost & Sullivan has specially established the Frost & Sullivan Best Newcomer Award, the Frost & Sullivan Outstanding Analyst Award, and the Frost & Sullivan 5 Annual Outstanding Contribution Award, Frost & Sullivan 10 Annual Contribution Award and Frost & Sullivan President's Special Award 5 Grand Prize, awarded to a group of employees who have performed outstandingly and achieved remarkable results. 2022 In [year], Frost & Sullivan, with the momentum of the Year of the Earthly Branches, embarked on a century-long journey. All employees of Frost & Sullivan will continue to delve into their work with meticulous dedication and excellence, staying ahead of industry trends, helping client enterprises grasp the future, and persisting in creating social value through more professional, higher-standardized, and competitive knowledge services. Spring sunshine caresses and all things thrive. Another spring has arrived. Let us join hands with the attitude of "resetting to zero", "restarting", and "updating" to live up to our ideals in the spring light and create a prosperous future together!

  On February 27th, as the 15th International Rare Diseases Day approached, Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') a global growth consulting firm dedicated to 'making the world a better place through growth', joined hands with the Beijing Pain Challenge Public Welfare Foundation (hereinafter referred to as 'Pain Challenge Foundation') to officially release the '2022 China Rare Diseases Industry Trend Observation Report' (hereinafter referred to as 'the Report'). According to statistics, there are currently more than 7,000 known rare diseases globally, with the number of patients suffering from rare diseases exceeding 300 million. In China alone, there are approximately nearly 20 million patients fighting against rare diseases. Source: Official website of International Rare Diseases Day Rare diseases, despite having a low incidence rate, carry a heavy burden on patients. Patients often face many difficulties. The first is 'difficulty in diagnosis', with a tortuous medical process and the disease being hard to confirm; the second is 'difficulty in treatment', as only 5% of rare diseases globally have effective treatment methods; and finally, there is 'difficulty in medication', which means that even after an accurate diagnosis and treatment, patients may not be able to afford or obtain the necessary medications, placing a heavy burden on patients and their families.   In recent times, the rare disease community has increasingly received attention from the state and all sectors of society. Multiple departments including national health, drug supervision, medical insurance, and technology have collaborated to support rare disease diagnosis and treatment through measures such as establishing a rare disease catalog, setting up a national rare disease diagnosis and treatment collaboration network, encouraging and supporting the research and development of rare disease drugs, prioritizing the review and approval of rare disease drugs, and promoting the inclusion of rare disease drugs in medical insurance. In addition, social entities such as patient organizations, commercial insurance companies, charitable enterprises, and non-profit institutions are also working together to explore multi-party co-payment models, alleviate the treatment burden on rare disease patients, and improve the accessibility of drugs (especially high-value ones).   At the end of 2021, the 'astronomically expensive life-saving drug' nusinersen injection, priced at '700,000 per injection,' was included in medical insurance, once again drawing public attention to the rare disease community. With the Chinese government's determination and efforts not to abandon any medication group and to serve patients, remarkable progress has been made in the diagnosis, treatment, and protection of rare diseases in China in recent years; however, overall, there are still diverse unmet needs in the rare disease community, including diagnosis and treatment, protection, rehabilitation, social integration, and more.   Against this backdrop, the '2022 China Rare Disease Industry Trend Observation Report' was born. It aims to review and sort out the development of rare diseases in China in terms of diagnosis and treatment, medication, support, and innovative services. It outlines the problems faced and progress made in this field over the past, and offers prospects for the comprehensive service system for rare diseases in China. It is hoped that it will be beneficial to policymakers, advocates, relevant institutions and practitioners, patients and their families, as well as the general public concerned about rare diseases in China.   On February 27th, Mr. Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China, was invited to deliver a keynote speech at the event celebrating the first anniversary of the launch of the Rare Disease Care Center at JD Pharmacy. Mr. Mao Hua pointed out that in recent years, the number of rare disease drugs approved has increased. In China, there are 87 drugs with clearly specified indications for rare diseases, covering 43 types of rare diseases. Among them, as of the end of 2021, after national medical insurance negotiations, 58 drugs have been included in the national medical insurance, covering 29 types of rare diseases. The dawn of medication options for Chinese patients has already appeared. In January 2022, the National Medical Products Administration issued the 'Technical Guidelines for Clinical Research and Development of Drugs for Rare Diseases', which relatively relaxed the requirements for clinical trials. Positive policies will continue to promote pharmaceutical companies in developing rare disease drugs; In addition, the success rate of orphan drug clinical research and development is higher than that of drugs for other diseases. Looking at the entire cycle from research and development to market launch, the success rate from Phase I clinical trials to approval for orphan drugs is 17.0%, while the success rate for all disease drugs is only 7.9%, which is half that of orphan drugs. Higher R&D success rates will also boost the confidence of pharmaceutical companies in R&D, motivating them to carry out research and development for rare disease drugs.   On the other hand, Mr. Mao Hua believes that China can draw on foreign regulatory systems to gradually improve its rare disease drug research and development (R&D) and support system. Although the state's attention to the rare disease community is increasing, and a series of supportive policies have been introduced, such as encouraging R&D of rare disease drugs, prioritizing their review and approval, and providing tax incentives, overall, there is currently no programmatic legislation similar to the Orphan Drug Act in China. Programmatic laws can systematically standardize the definitions of concepts related to rare disease drugs, as well as drug research and development, introduction, production, supply, assurance, market supervision, etc., further promoting innovative research and development of orphan drugs for rare diseases and their introduction into the market. In the National Medical Insurance Catalogue for 2021, seven new drugs for rare diseases were added. Notably, the high-value rare disease drug Nusinersen Sodium Injection and Agalsidase α Concentrated Solution for Injection have been included in the medical insurance, reflecting the country's respect for the life and health of every patient. This expansion of universal coverage is achieved while balancing patient needs with the affordability of the medical insurance fund. According to a Frost & Sullivan survey, China is currently gradually constructing Led by the government and centered on the national basic medical insurance, multiple-party protection systems have been established in various regions such as Shanghai, Zhejiang, Shandong, Foshan and Guangzhou in Guangdong Province. Currently, multiple social forces are continuously promoting the guarantee of rare disease medications. For example, charitable organizations drive more social forces to participate in 'multi-party payment'; innovative payment platforms start from the perspective of patients, creating multi-level patient services and security systems; commercial insurance is also constantly exploring ways to pay for rare disease medications; caring enterprises fill the gaps in security costs, sharing risks to assist in medication security. In addition, large pharmaceutical companies are also actively deploying in the field of rare diseases. For example, Takeda Pharmaceutical spent up to $65 billion acquiring the British pharmaceutical company Shire. In recent years, capital has continuously flowed into the research and development of rare disease drugs, innovative biotechnology platforms, internet technology, and innovative healthcare services, promoting the construction of a rare disease ecosystem. Resources are collaborating with each other, injecting vitality into the rare disease industry chain. Mr. Mao Hua said that in the future, Frost & Sullivan will continue to keep track of the latest industry trends, continuously release white papers on biomedicine and healthcare industries, and contribute to the healthy and rapid development of the industry. At the press conference, Wei Xing, CTO of Huanuo Omics, proposed that policy support is at the core of the development of the rare disease industry, while technological innovation helps with early screening, prevention, diagnosis, and treatment of rare diseases. Chen Jun, COO of Weisheng Pharmaceutical, stated that solving rare diseases is a long-term battle. As a responsible innovative pharmaceutical company, Weisheng Pharmaceutical is willing to contribute to making rare disease patients in China diagnoseable, treatable, and accessible. (From left to right: Wu Daling, Head of Prescription Drug Business Unit at JD Health Medicine Business Department; Wei Xing, CTO at Huanuo Aomei; Chen Jun, CCO at Weisheng Pharmaceutical; Guo Jinchuan, Director of Information Research at the Pain Challenge Foundation; Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China) It is worth mentioning that the report innovatively includes: (1) Promote legislation related to 'rare diseases' and 'rare disease drugs', (2) Establish a systematic top-level design and coordination mechanism for rare diseases, (3) Establish a comprehensive support system for rare disease screening, diagnosis, treatment, management, and rehabilitation, (4) Establish a comprehensive value evaluation system for rare disease drugs and services, (5) Prioritize the inclusion of rare disease medications in medical insurance, establish a national special medical insurance system for rare diseases, encourage local pilots, (6) Government guidance, explore mechanisms for diverse social forces to participate, (7) Explore diversified innovative payment strategies for medical security and services, (8) Establish patient participation guidelines for promoting drug research and development and access standards, (9) Special policy support for special medical foods, (10) Encourage the development of rare disease medical innovation service platforms. Ten aspects were discussed, offering pertinent suggestions and earnest prospects for the comprehensive rare disease service system in China.   This report has also received joint recommendations and messages from experts from industry, academia, and research institutions, including: Wang Chenguang, a director of the Pain Challenge Foundation and former dean of the Law School at Tsinghua University; Shi Luowen, director of the International Research Center for Pharmaceutical Management at Peking University; Xu Kaifeng, professor of Respiratory and Critical Care Medicine at Peking Union Medical College Hospital and chairman of the Respiratory Disease Branch of the China Rare Diseases Alliance; Wang Yigou, founder and vice-chairman of the Pain Challenge Foundation; Dong Dong, head of the Rare Diseases Real-world Data Research and Experiment at the Shenzhen Research Institute of The Chinese University of Hong Kong; Wei Xing, CTO of Huanuo Aome; Jin Enlin, CEO of JD Health; Lu Anbang, CEO and director of Vissen Pharmaceutical, etc. These recommendations and messages are highly valuable for industry reference.   As Wang Chenguang said: 'Rare diseases are not just a matter for patients, their families, a few medical staff, and pharmaceutical companies. They are a major issue that concerns the entire society. Because caring for the minority reflects great love, working together can promote social civilization, and common prosperity can leverage institutional advantages.' The '2022 China Rare Diseases Industry Trend Observation Report' not only reveals the current challenges posed by rare diseases to society as a whole but also calls for the conscience and participation of the entire society. It advocates for the establishment of an all-round system to address rare diseases, which will strongly promote the development of the Healthy China initiative. "   Frost & Sullivan sincerely looks forward to working with all sectors to pay attention and jointly ensure the well-being of people living with rare diseases, striving to help them enjoy a colorful life. We will continue our commitment to research in the field of rare diseases, actively fulfill our social responsibilities, and continuously contribute to the construction of 'Healthy China 2030'.

On the evening of February 23, 2022, the launching ceremony of Frost & Sullivan Jieli (Shenzhen) Cloud Technology Co., Ltd. (hereinafter referred to as 'Cloud Tech') was successfully held at the Renaissance Shenzhen Luohu Hotel. Cloud Technology was jointly established by the mainland affiliates of Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') and TradeGo Financial Technology Co., Ltd. (08017.HK, hereinafter referred to as 'TradeGo'), aiming to provide Hong Kong-listed companies planning to go public or those already listed with one-stop full-cycle investor relations management and comprehensive investment and financing services including precise promotional roadshows and public offering assistance. The company is fully committed to the dissemination and realization of its corporate value. At the launch ceremony, Dr. Wang Xin, Global Partner and President of Frost & Sullivan Greater China, Mr. Liu Yong, Chairman of TradeGo's Board of Directors, Mr. Wan Yong, Executive Director of TradeGo and Chairman of Cloud Technology, and Mr. Wang Chenhui, Managing Partner and Executive Vice President of Frost & Sullivan Greater China, jointly lit the start ball. Dr. Wang Xin, Global Partner at Frost & Sullivan and President of the Greater China Region, said, TradeGo and Frost & Sullivan jointly established CloudTech, a natural progression following years of in-depth collaboration and continuous improvement. In the future, cloud technology will form a clear division of labor with Frost & Sullivan and TradeGo's existing businesses to create an 'iron triangle'. Together, we aim to make positive contributions to the development of Hong Kong's capital market, accelerate the growth pace of listed companies in the capital market, and achieve a benchmark position in all aspects of growth and innovation.   Mr. Wan Yong, Executive Director of TradeGo and Chairman of Cloud Technology, said, Both TradeGo and Frost & Sullivan are well-known enterprises in the Hong Kong financial services market and leading companies in their respective segments. The establishment of CloudTech is an important achievement of the strategic cooperation between Frost & Sullivan and TradeGo, marking a significant milestone in the development of both parties' businesses. Cloud Technology will cooperate with various capital market institutions to fully promote the success and glory of listed companies in the capital market.   Frost & Sullivan' As a global growth consulting firm, it is a leading enterprise in the field of domestic investment strategy consulting. It has helped nearly a thousand companies successfully list on the Hong Kong stock market and overseas. After more than 60 years of accumulation, it has formed a market-leading competitive edge in terms of research data, market resources, service experience, etc. It has ranked first in market share for IPO industry research consultants in Hong Kong stocks for many consecutive years, holding an absolute leading position. 'TradeGo' It is a listed fintech company in Hong Kong, providing market quotation trading products for over 140 Hong Kong brokers. It covers nearly 50% of the more than 3 million Hong Kong stock transactions and new share investors, assisting more than 50 Hong Kong new share companies in successful offerings. It holds an important position in the public offering assistance services of the Hong Kong capital market. The joint establishment of the cloud technology platform by both parties this time will deeply integrate their core strengths. Through concerted efforts, it will provide comprehensive and all-round capital market services that are digital, online, and compliant during the process of assisting enterprises with IPOs. This will help enterprises steadily develop leveraging the capital market and promote leapfrog development for advantageous enterprises through capital market support.  

With the rapid evolution of gene and cell engineering technologies, gene and cell therapy has made significant progress and become one of the most promising treatment methods for many traditional incurable diseases. Cell and gene therapy are ushering in a new era of medicine. 2022 year 2 month 24 day -25 Date, hosted by MedMakers 2021 CSGCT The Gene and Cell Therapy Medicine Summit was successfully held at the Shanghai Longmeng Hotel. The theme of this conference is 'Ramping Up Efforts & Assisting in New Beginnings'. The summit focused on multiple industry perspectives such as cutting-edge innovative technologies, market development trends, regulatory review regulations for cell and gene therapy globally, safety of genetically modified products, innovative production processes for gene drugs, current clinical treatment status of solid tumors and rare diseases. Frost & Sullivan Frost & Sullivan Dr. Wang Xin, Global Partner and President of Greater China at Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan'), was invited to attend this summit and delivered a speech on the current global market situation and development trends of cell and gene therapy. With the development of medical technology and the increasing maturity of regulatory systems in various countries, globally CGT The treatment market has entered a golden age, with cell and gene therapy showing a trend towards development that combines traditional cell therapy with gene therapy.   Dr. Wang Xin pointed out that the limitations of traditional cellular immunotherapy have driven the combined development of cell therapy and gene therapy. The continuous progress in genetic engineering technology, expression vectors, and gene delivery methods CGT The development provides broad space for innovation.   1970 era, restriction enzyme, DNA The combined discovery of ligases and gel electrophoresis DNA Specific fragments can be moved from one environment to another, for example, by cutting a specific gene from a chromosome into a plasmid. 2019 In [year], the world reported for the first time the use of CRISPR Gene editing technology knocked out hematopoietic stem cells in patients CCR5 Gene therapy, followed by the successful reinfusion of cells into patients to treat those with AIDS complicated by acute lymphoblastic leukemia.   Dr. Wang Xin stated that breakthroughs in gene editing and vector delivery technologies in recent years have driven CGT rapid development. Currently, the United States FDA Approved for sale CGT Products in total 20 one, of which 8 A for gene therapy Products; Those approved for sale in Europe CGT Products in total 12 one, of which 6 A gene therapy product; although in China CGT The approved quantity of the product is still lower than that in Europe and America, but there is huge market development potential in the future.   since 2015 Starting from this year, China CGT The number of clinical trials for therapies has seen explosive growth. 2015 Year to 2020 Over the year, approximately 250 item CGT Clinical trials have become the second-largest region in terms of volume, with an annual compound growth rate exceeding 60% ranked first globally.   Currently, China is conducting CGT Clinical trial approximately 100 items, involving approximately 80 Home. A large number of gene therapy drug research and development projects have entered the clinical stage. It is expected that with increasingly clear regulatory systems, gradually increasing R&D investment, and the overall vigorous development of innovative industries, more cell and gene therapy products will enter the clinical research and development phase in China in the future. By clinical stage, globally 36% The ongoing clinical trials are in clinical I period 50% Conducting clinical II period 9% In clinical use III Phase. Approximately half of the globally ongoing clinical studies are at a critical II Phase, entering clinical III The success rate of post-hive gene therapy research and development will double.   Meanwhile, gene therapy clinical trials in progress in China are mainly at the clinical phase. I Percentage of the phase, approximately 52% , for CGT The research and development is still in its early stages, but clinical III The proportion of the period is higher than the global average, accounting for approximately 13% It is expected that the proportion of successful research and development and market launch in ongoing clinical trials will also be relatively high. In the future, it will be in China CGT A period of rapid development in research and development. According to the research results of Frost & Sullivan, as of now, FDA and EMA Approved in total 4 A gene therapy for hereditary rare diseases that is currently available.   In recent years, with continuous technological improvements, the safety and effectiveness of gene therapy have been enhanced. Breakthrough results have been achieved in the clinical treatment of various hereditary rare diseases such as hemophilia, leukodystrophy, Duchenne muscular dystrophy, and congenital amaurosis. In addition, CGT The application areas of clinical trials are gradually expanding, and their use in chronic diseases such as diabetes and cardiovascular disease, as well as infectious diseases like AIDS, is also increasing, bringing hope for the cure of these diseases. Subsequently, Dr. Wang Xin demonstrated the market scale of gene therapy globally and in China. The data shows that the global market scale of the gene therapy industry has been 2016 Since the beginning of the year, it has witnessed rapid growth. Against the backdrop of favorable policies and increasing R&D investment, the market scale of China's gene therapy industry has also shown a trend of rapid expansion. CAR-T The future market potential for therapies is enormous. 2016 Year to 2020 In the year, the global gene therapy market compound annual growth rate was 153% It is predicted that the market scale of future gene therapy will still maintain a rapid growth trend, estimated to 2025 The global overall market size will reach 305.4 billion dollars 2020 Year-end 2025 The annual compound annual growth rate reaches 71% .   and 2016 Year to 2020 In [year], the China gene therapy market grew from 0.02 USD billion growth to 0.03 billion US dollars, with a compound annual growth rate of 12% are expected to 2025 The overall market size in the year will rise to 25.9 billion dollars 2020 Year to 2025 The annual compound annual growth rate reaches 276% .   Globally, CGT The industry is widely favored by capital, with mainstream capital markets such as public offerings, private equity funds, and venture capital showing great enthusiasm for the cell and gene therapy industry. The total amount of investment and financing is from 2016 year 27.86 billion US dollars, increasing to 2020 year 105 billions, although private equity funds and venture capital are still the main entities in investment and financing, occupying the vast majority of market share, but public offerings IPO listing The method is gradually taking up a larger share, from 2016 year 5.94 Billion USD increased to 2020 year 37 billion US dollars, exceeding the scale 2016 year 6 times, highlighting the unprecedented enthusiasm of the secondary market for cell gene therapy. Additionally, in the field of mergers and acquisitions, large multinational corporations are also actively deploying in the cellular gene therapy sector through acquisition. Among them, Bayer, Eli Lilly, Sanofi, and Novartis are particularly typical. According to Dr. Wang Xin, the acquisition of Eli Lilly's gene therapy for neurodegenerative diseases has brought a series of pipelines related to these diseases, broadening its competitive options; Bayer's acquisition of Pompeii disease gene therapies and a full set of adeno-associated virus technologies has, on one hand, increased its stakes in the gene therapy field, and on the other hand, the acquisition has brought more than 500 A patent related to the development and production of adenovirus has made Bayer a global leader in viral vector technology. "Compared with European and American countries, China has a shorter development time for cell and gene therapy, which is still in its infancy. However, with continuous technological innovation and policy support, CGT The industry can achieve rapid development, helping China's biopharmaceutical industry enter a new era." said Dr. Wang Xin.    He introduced that China's cell and gene therapy in 20 century 90 There have been clinical studies for many years, up to 2005 There are two drugs targeting solid tumors each year CGT Products, but then the popularity faded in the following years, until 2010 After the Spring Festival, cell therapy has begun to attract the favor of major pharmaceutical companies and research institutions. To this day,    domestic CGT The industry has formed a relatively complete industrial chain, mostly focusing on the development of downstream treatment products. In the upstream field of key raw materials and production processes, imported brands still dominate, leaving significant room for domestic substitution.   Dr. Wang Xin pointed out that China's vast potential patient base CGT As demand continues to grow, coupled with the emergence of a large number of biotech companies adapting to various indications and the capital market's investment boom, China's future CGT The market will show the following development trends:   （ 1 Expansion of therapeutic areas, CGT , CDMO Rapid development and reduced R&D costs. 2 At the corporate valuation level, domestically CGT The overall level of enterprise performance is currently lower than that of overseas companies, indicating significant growth potential; 3 ) At the same time, domestically GCT Enterprises are paying more attention to relatively traditional hematology malignancies and related fields. The expansion of indications is not as diverse as that of overseas companies, and in the future, domestically CGT The market still has significant room for growth.     In addition, CGT The treatment cost of products is high, and patients have low accessibility. He believes that a diversified payment model is CGT A major driving force for product commercialization is the diversified medical insurance payment models in major European and American countries CGT Commercial development has provided support,   It is expected that China's diversified medical insurance system will also drive CGT Industrial development.   " Finally, Dr. Wang Xin said,   With policy, capital, and talent support, the Chinese pharmaceutical market is highly favored by the capital market, supporting biomedicine / Biotechnology has always been a hot investment area in China's healthcare industry, especially in recent years. CGT The field has gradually become a focus of investment attention.   According to China CGT The sector's financing transaction data shows that currently, private equity financing, IPO listing Various transaction forms such as mergers and acquisitions, cooperation, etc., are booming. Heavyweight trades keep emerging. 2020 annual CGT The total amount of field financing is about 126 billion dollars 2016 Year to 2020 The annual compound annual growth rate reaches 59.3% Looking at treatment modalities by investment segment, CAR-T Therapy is the most focused treatment method. "It is expected that the entire pharmaceutical investment and financing market will continue to be highly active in the future. CGT The continuous increase in capital investment in the field will also drive CGT Industrial development. China has a large population base and a high number of patients with rare diseases and tumors, resulting in a significant unmet clinical medical demand. R&D innovation is being carried out based on the current situation to introduce globally leading technologies. CGT technology, and utilize the current China CGT China, with a favorable policy and investment environment for the track industry CGT "The treatment market holds broad development opportunities and prospects," concluded Dr. Wang Xin.

Frost & Sullivan insights In April 2018, the Hong Kong Stock Exchange added Chapter 18A 'Biotechnology Companies' to its Main Board listing rules, allowing biotechnology companies that have no revenue or profit to submit listing applications. As a result, the Hong Kong Stock Exchange has become the preferred listing destination for an increasing number of biotechnology companies. Is the enterprise suitable for going public in Hong Kong? What will the 18A system bring to enterprises? Which tracks have more investment opportunities in the future? On January 24th, the 'Investment Activity Report on the Issuance of 18A Biotech Companies in Hong Kong' (hereinafter referred to as the 'Report'), co-authored by Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan'), TradeGo, and LeadLeo, was officially released. It provides a reference guide for biotech companies that are already or intend to go public in Hong Kong. Daily Economic News The successful development of an innovative drug cannot be separated from the comprehensive support of policies, systems, and capital, and the '18A' system is the best illustration of this statement.   In April 2018, the Hong Kong Stock Exchange added Chapter 18A 'Biotechnology Companies' to its Main Board listing rules, allowing biotechnology companies that have no revenue or profit to submit listing applications. As a result, the Hong Kong Stock Exchange has become the preferred listing destination for an increasing number of biotechnology companies.   However, it cannot be ignored that the average fundraising amount has pulled back and market liquidity is low, which has raised concerns among companies and investors. Are enterprises suitable for going public in Hong Kong? What will the 18A system bring to enterprises? Which tracks have more investment opportunities in the future?   On January 24th, the 'Hong Kong Biotech Companies 18A IPO Investment Guide: A Report Co-written by Frost & Sullivan, TradeGo and LeadLeo' (hereinafter referred to as the 'Report') was officially released. It provides a reference guide for biotech companies that are already or intend to list on the Hong Kong stock market.   Financing Achievements: 48 companies have been listed, with capital heavily invested in biopharmaceuticals Since 2018, a total of 48 companies have gone public through the 18A rule, with 23 companies currently in the delisting (i.e., hearing stage) status.   In terms of pre-listing financing, 18A companies have a high frequency of fundraising before listing, with prominent valuation growth. Specifically, among the listed 18A companies, 39 have had between 2 to 6 rounds of fundraising before listing, accounting for as high as 84.78% of the total. Among them, the company with the most fundraising rounds before listing is Qiming Medical (02500.HK), which has undergone 12 financings.   Moreover, there were at most 16 companies whose pre-listing valuation increased by 10 to 50 times. The issued valuations of 18A companies all increased to varying degrees compared to their last round of financing. Among them, the highest increase was seen in CanSino Biologics (09966.HK), with the issued valuation increasing by as much as 66.26% compared to the last round.   In addition, the time taken for 18A companies to submit their filings to the issuance market is generally shorter than that of other companies. According to the 'Report', among the listed 18A companies (excluding Chinese concept stocks returning from overseas listings), the average filing cycle from the first submission date to the first day of public offering is about 127 days (natural days, the same below). The longest filing cycle is held by Yongtai Biotech (06978.HK), with a duration of 301 days, while the shortest is held by Oukangwei Vision Biotech (01477.HK), with a duration of 61 days. From the perspective of the own accumulation of listed companies, the average establishment duration is 8 years. The company with the longest establishment duration is China Antibody (03681.HK), which took 18 years to establish; the shortest duration is 3 years, including Yundeng Newray (01952.HK) and Ocumivir Biologics.   In terms of post-listing financing, 18A listed companies are particularly favored by investors. Among the 48 listed companies, the raised funds accounted for 9.16% of the total fundraising on the Hong Kong Stock Exchange during the same period. Among them, BeiGene (06160.HK) raised the most funds, amounting to HK$7 billion; the company with the lowest fundraising was Yasheng Medicine (06855.HK), about HK$417 million.   However, from the perspective of distribution ratio, the issuance of 18A companies generally fell below the new share issuance inertia of a 25.00% distribution ratio. Among them, the company with the highest distribution ratio was CanSino Biologics (06185.HK), with an issuance proportion of 26.24%, while the company with the lowest distribution ratio was MicroPort Robotics (02252.HK), with an issuance proportion of 3.80%.   One of the reasons for this phenomenon lies in the market's acceptance of 18A bonds. In the early stages of the 18A reform, issuers that had undergone several financings might reduce their issuance ratio to ensure a successful issue and balance the interests of various parties.   It cannot be ignored that in the new share issuance market of Hong Kong, China, cornerstone investors (large or professional institutional investors, etc.) have played an important role. Among them, there are 119, 63, and 8 cornerstone investors participating in the biopharmaceutical, medical device, and frontier medical technology sectors respectively, accounting for 82.64%, 43.75%, and 5.56% of the total number of cornerstone investors.   This means that among the 18 listed A-share companies, the biopharmaceutical sector is currently the main track for cornerstone investors to enter. Against the backdrop of the biotechnology industry, the Report predicts that the biopharmaceutical sector may be a battlefield for capital pursuit over the next three to five years. Three major tracks: The market value differentiation among enterprises is evident, and the pharmaceutical industry has started to peel off the “-B” tag. From an industry perspective, 71 biotech companies mainly focus on three tracks: medical devices, pharmaceuticals, and cutting-edge medical technologies. Among them, there are a total of 47 companies in the pharmaceutical track, which is the most numerous, accounting for 66.2% of all 18A companies; the number of companies in the cutting-edge medical technology track is the least, with only 4 companies, all of which are AI diagnostic and treatment device enterprises, accounting for 5.6%.   Among the listed biotech companies, there are 35 pharmaceuticals, 12 medical devices, and 1 cutting-edge healthcare technology company.   Some analysts believe that this is related to the development stages of various industries. Since the pharmaceutical policy reform in 2015, with the improvement of patients' affordability, the growth of the patient population, and the expansion of medical insurance coverage, the development of China's biopharmaceutical industry has been unprecedentedly rapid, and the variety of sub-industries has become relatively complex.   In 2020, the market scale of the domestic pharmaceutical industry was 1.6 trillion yuan. According to the 'Report', with an overall annual compound growth rate of 6.8%, the market scale is expected to expand to 2.3 trillion yuan by 2025.   Market value is the most direct reflection of market development expectations. In terms of market value, the total market value of the 35 listed companies in the biopharmaceutical subsector alone amounts to HK$737.43 billion, making it the sector with the largest total market value among the three major tracks. However, the August 28th effect is evident, as the market value of a single company, BeiGene, approaches 29.1% of the total market value of the 35 companies, which is close to the sum of the market values of all 27 18A biopharmaceutical companies ranked after the top 27.   However, the pharmaceutical industry still accounts for the largest proportion by weight, with chemical drugs accounting for 49% of the pharmaceutical market in 2020, amounting to 7945 billion yuan. Next is traditional Chinese medicine, which occupies a 30% share of the pharmaceutical market with 4880 billion yuan. But biopharmaceuticals had the fastest average annual compound growth rate from 2016 to 2020, and their market size accounted for 21% of the pharmaceutical market in 2020.   The development stage of the medical device sector is relatively mature. The Report predicts that the industry will maintain an average annual compound growth rate of 13.9% from 2020 to 2024E, a decrease of 5.4 percentage points compared to the 19.3% compound growth rate from 2015 to 2020. The compound growth rate of China's medical device market is 19.3%. In the future, the growth of China's medical device market will be mainly driven by factors such as increased domestic product penetration rates, technological progress, increasing penetration rates, and continuous policy support from the state. This also results in a relatively weaker market value. The total market value of the 12 listed medical device companies is HK$137.05 billion, less than 20% of that of the pharmaceutical industry.   The market capitalization differences are also significant. The number of companies with market capitalizations exceeding HK$5 billion, HK$10 billion, and HK$50 billion is 8, 3, and 1 respectively. Among them, MicroPort Robotics has the highest total market capitalization in this sector, accounting for as high as 41.0% of the market value.   Looking at sub-industries, these companies mainly focus on areas such as vascular intervention, neurosurgery, non-vascular intervention, diabetes, diagnostic and therapeutic equipment, and molecular diagnosis. Among them, 12 companies are involved in the largest number of vascular intervention projects; the main indications are distributed across heart and vascular diseases.   In the frontier medical technology sector, which has the fewest listed companies, the current focus is mainly on the AI diagnostic and treatment equipment industry. Not only did Eagle Eye Technology (02251.HK) achieve a zero breakthrough in listing as an 18A company in 2021, but the market is also in the early stages of sprinting forward.   The Report shows that from 2019 to 2020, the market scale of AI diagnostic and treatment equipment in China increased significantly from 124.7 million yuan to 291.8 million yuan, and it is expected to increase to 755.688 billion yuan by 2030. From 2021 to 2025, the annual compound growth rate is expected to be 152%, and from 2026 to 2030, it will be 26%. From the perspective of earnings-per-share capability, if a listed company has met the market value/earnings ratio test requirements under Rule 8.05(3), its management team has remained unchanged for at least the past three fiscal years, and the ownership and control rights in the most recent audited fiscal year have also remained unchanged, then its stock name may not carry the 'B' symbol.   Currently, the four companies that have removed the 'B' symbol are all biopharmaceutical companies, namely BeiGene, Sino Biologics (01801.HK), Junshi Biosciences (01877.SH), and Fosun Pharma (02696.HK).   Looking ahead: Fundraising may continue to be reduced, and the listing location varies by company As of December 31, 2021, there were a total of 23 companies classified as 18A that had submitted their listing applications but not yet been listed on the Hong Kong Stock Exchange.   According to the segmentation of tracks, compared with the 18 A-share listed companies where biopharmaceuticals and medical devices accounted for an absolute weight, among the 23 companies that have been delisted but not yet listed, biopharmaceuticals still account for more than 50%. The proportion of frontier healthcare and medical services has significantly increased, making the ratio more balanced.   In terms of the number of issuers, from 2018 to 2021, there were 5, 9, 14, and 20 listed companies on the 18A board of indexes respectively, showing a gradual increasing trend overall, with more IPOs in the second half of the year; however, in terms of average fundraising amount, it was slightly larger from 2020 to the first half of 2021, and then saw a slight correction in the second half of 2021.   The Report anticipates that in 2022, the number of listed companies on the market for 18A stocks will remain at around 20, with an average fundraising amount possibly continuing a downward trend.   "The 18A market has gone through three stages of development: exploration phase, frenzy phase, and adjustment phase," Liu Shoujian, Deputy Chief Executive Officer of CCB International, believes. "In the future, on one hand, more global high-quality biotech companies will choose to list on the 18A market, while on the other hand, the IPO enthusiasm and subsequent stock price performance of different companies will continue to diverge." Facing the future of the 18A market, Liu Shoujian said. " The Report shows that the issuance of 18A shares is affected by the new share market and the healthcare sector's performance. In the future, the probability of subscription orders being ten thousand times higher than the offering amount will decrease, but it remains a hot sector in the Hong Kong IPO market. It is worth noting that for pharmaceutical companies that have mastered certain R&D technologies but have raised large amounts of funds and have not yet achieved profitability, listing on the Sci-tech Innovation Board (STAR Market) is another option. However, the similarities and differences between it and the Hong Kong capital market in China are worthy of attention.   At the 6th China Pharmaceutical Innovation and Investment Conference, Dai Wen, Chief Analyst for the A+H Healthcare sector at Huatai Securities Research Institute, analyzed investors' preferences. She believes that "investors in the mainland and Hong Kong have some different preferences." Specifically, there are more traditional Chinese medicine companies listed on the Hong Kong Stock Exchange, but there are more medical device companies in the A-share market.   In addition, the choice of listing location is closely related to the company's needs and the background of its investors. For example, pharmaceutical companies that want to conduct global clinical trials may prefer to list on the Hong Kong stock market for dollar financing.   Bao Haijie, Managing Director of the Hong Kong Exchange and Co-Head of Market Development, believes that in addition to financing time and price, the difficulty, timing, and approval process for refinancing should also be considered within the company's listing considerations. 'What is important is not only the listing cost but also whether there are ongoing legal risks and litigation risks later on. The costs in this regard mainly include considering the possibility of class-action lawsuits, policy uncertainties, regulatory uncertainties, and whether a legal team needs to be hired for legal support.'   Wang Yinxiang, Chairman of Gaoke Science & Technology Group (01167.HK), stated that for biotech companies without revenue, the speed of financing is very important. The A-share market has a large trading volume, and it usually takes 6 months to 1 year to raise funds in the primary market; however, the Hong Kong market in China has a faster financing process, with most financings concluding within a week after listing. However, financing in the Hong Kong market is a test of the company's and its products' international market recognition, and liquidity is relatively lower.   It can be seen that companies have different opinions on the choice of listing locations. However, regarding the market development logic, more consensus will surely be reached within the industry.   Wang He, co-founder and CEO of Yongtai Biotech (06978.HK), believes that in the first two decades of the 21st century, the pharmaceutical industry has experienced a rapid development from small molecules to large molecules, and then to cell and gene therapy. In the next two decades, using more complex cell and gene therapies to treat refractory diseases has become the main direction for biopharmaceutical development.   *This article is reprinted from 'Daily Economic News', with reporter Lin Zichen. The original article was titled 'From 0 to 48 Companies, What Else Does the Hong Kong Stock Market's '18A' Biotech Company Listing Rules Bring?'