The coronavirus crisis will lead to increased investment opportunities in the Chinese healthcare system, particularly related to medical robots and vaccines, according to investment banking advisor BDA Partners.
According to a new BDA Partners report, Covid-19 (as the coronavirus is known) will lead to “certain sub-sectors [in the Chinese healthcare sector] benefiting from favorable government policies and increased private and public health investments”.
The report added that COVID-19 has “drastically raised people’s health awareness”. As a consequence, the report predicted a rise in both public and private health spending. The report said “We expect the following subsectors to benefit, generating fundraising and buyout opportunities: vaccines, medical robots, IVD (in vitro diagnostic devices), intensive care unit equipment and devices, online medical consultation, home-based medical devices and over-the-counter medicine.”
Meanwhile, the report also said that the preventative, diagnostic and therapeutic solutions for COVID-19 have generated “explosive short-term demand” for related medical products. It continued: “While the demand spike is temporary, we expect some medical products to experience a transformation to long-term increased demand.”
Healthcare has been a “hotspot” for private equity investments in recent years, according to BDA Partners. “We expect industry consolidation to accelerate, creating ample opportunities for both industry players and PE investors alike.” A BDA Partners statement concluded: “We believe that COVID-19 does not change the ‘principles’ of cross-border M&A in China – outbound deals focus on the acquisition of international brands, products and technology, while inbound deals focus on entering and capturing markets with strong demand and growth potential. Overall, COVID-19 outbreak is an opportunity rather than a crisis for capable private equity health investors, especially in certain sub-sectors.”
BDA Partners is led by senior managing directors Euan Rellie (New York), Charles Maynard (London), Andrew Huntley (London, Ho Chi Minh City) and Paul DiGiacomo (Ho Chi Minh City, Hong Kong, Singapore).
To read the full report, click here