聚焦拥有差异化产品实现海外增长的日本医疗科技/医疗健康行业公司

Focus on companies achieving growth overseas with differentiated products Investment recommendations & sector outlook ▪US：The most important market for Japanese medical equipment manufacturers ✓Firm trend in the number of cases and patients but partially weak in hospital capex due to inflation and publicbudgetconstrains✓Active acquisitions in growth fields: Surgical robots, ablation treatments, Structural Heart✓Medical costs rising is a social issue: Shift from high-cost product to patientjourney▪Ratio of national health care expenditure included in 2024 GDP: 17.2%(Japan: 10.6%) ▪Japan:Focus on revision of reimbursements (FY26) ✓FY26: Revisions of reimbursement fee ▪Higher fees for hospitals that provide intensive care to patients▪Flexible fee setting for wage hikes and inflations▪Medical DX: Possible additional fees for data sharing ▪China: External environment changing due to Healthcare system reform and preferential measures for domesticproduction ✓Promoting some measures such as DRG/DIP and uniform reimbursement fees to control medical spending✓Expansion of range in application ofcentralisedpurchasing and strengthening of preferential measures for domesticproduction Note:AsahiInteccand Medtronic are FY24 Actual Comparison with US medical device manufacturers ROEvs.EBIT margin (FY25 Actual) Comparison with US medical device manufacturers ▪Gross margin: Olympus is on a par with top US companies▪Gross margin: Terumo and Sysmex are relatively low▪SG&A ratio: Olympus has 50%, higher than other companies▪OPM: Japan companies are inferior to U.S. companies Source:UBS Evidence Lab, Colorado Hospital Association's Databank Program China business ▪Preferential measures for domestic products: Measures to be strengthened in the medium term to promote local production✓Due to the revision of the "domestic production" definition, final assembly alone may not be considered domestic production✓Preferential treatment when bidding for domestic equipment (20% price advantage)▪Centralized purchasing: Possibility to be implemented with a wider range of products (e.g., Hemostasis, POCT, genetic testing)✓Centralized purchasing on IVD will be strengthened in the future✓Will implemented gradually on immunology and biochemical testing from 2024✓Possibility to be implemented on blood clotting, POCT, and genetic testing within 2-3 years▪Anti-Corruption Campaign: To be extended for some time due to economic slump✓Impact on hospital equipment investment ending around fall 2024▪Progress in Healthcare System Reform✓Introduction of the DRG (Comprehensive Payment) system: negative impact on the number of blood tests, negative impact haspeaked out by the end of 2025✓Promoting data sharing between hospitals: Free data sharing✓Unification of Reimbursement: Unification of different reimbursement for each province ▪FY2026 Reimbursement revisions and work conditions reform ✓Supporting hospitals, which management is depressed by inflation and labor shortages is a key theme ▪Most facilities can not eliminate deficits due to increased sales and costs ✓FY2025 supplementary budget has been decided, and subsidies will be provided bases on the number of hospital beds and emergencycasesreceived. ▪Provide wage increase and inflation support; Support for building, extending and renovating healthcare facilities; Support for adopting ICTequipment to raise productivity ▪Chronic shortage of young nurses working at hospitals ✓New Regional Medical Care will start sequentially from April 27 ▪Centralize surgeries and emergency care into facilities with an acute-stage care function▪FY2026 revisions: Introduction of new acute care evaluation based on emergency transports, number of surgeries, and market sharein theregion ✓Progress of Digital health ▪Standardization of electronic medical records: Sharing of three types of medical information (FY2024)•provision documents and six pieces of information among medical institutions▪Obligation to use of emergency summaries (medical history, drug information, etc.) for emergency patients▪Central-government-led for the introduction of cloud-based standard electronic medical records (introduction at all medical institutions by2030)•FY2024: Plans to develop an alpha version of the system for clinics Stock price vs. TOPIX ▪GlobalMedtech Relatively low multiples. Terumo and Olympusare outperformersSlight struggle for high-multiple stocks ▪DomesticMedtech Stocks with catalysts showing highperformance since beforeCovidConcerns about a pullback in special demanddue to the pandemic caused overall lowperformance ▪Medical IT・Services M3 andMedPeerhave seen low performance inthe past 1-2 yearsMedley maintains relatively high performancedue to its stable business base Valuations Valuations Shimadzu Source: Company data, UBS estimates Source: Company data, UBS estimates Valuations Source: Company data, UBS estimates Individual stocks M3(2413, Buy, PT ¥2,040) Ship Healthcare HD (3360, Neutral,