HAITONG INT'L: in August, the number of successful bids for orders improved, and there is a resurgence in demand for medical IT.

HAITONG INT'L released a research report stating that there has been a noticeable improvement in the number and amount of winning bids in August, indicating a strong demand for medical IT construction. The cumulative winning bid situation for 2024 has remained stable. The second half of the year is a peak period for the medical IT business, and with industry policy support, demand is expected to accelerate. Recommended stocks to watch include Winning Health Technology Group (300253.SZ), B-Soft Co., Ltd. (300451.SZ), Sichuan Jiuyuan Yinhai Software (002777.SZ), and Goodwill E-Health Info (688246.SH). Improvement in August winning bid performance According to publicly available winning bid information on the procurement website, the winning bid amounts in August for Winning Health Technology Group, B-Soft Co., Ltd., Sichuan Jiuyuan Yinhai Software, and Goodwill E-Health Info were 100 million yuan, 43.03 million yuan, 102 million yuan, and 42.16 million yuan, respectively, with year-on-year growth rates of 80%, 40%, 48%, and 126% respectively. From January to August 2024, the cumulative winning bid amounts for Winning Health Technology Group, B-Soft Co., Ltd., Sichuan Jiuyuan Yinhai Software, and Goodwill E-Health Info were 784 million yuan, 610 million yuan, 525 million yuan, and 198 million yuan, respectively, with year-on-year growth rates of -7%, 18%, 89%, and -24% respectively. In terms of large orders, there was also a slight rebound in August, with the four companies winning 6 projects worth tens of millions of yuan or more, with the highest amount reaching 47.09 million yuan. Promotion of expanding the opening-up pilot work in the medical field expected to drive medical IT construction demand On September 8th, the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration issued a notice regarding the pilot work of expanding opening-up in the medical field, which mentioned allowing the establishment of wholly foreign-owned hospitals (excluding traditional Chinese medicine, excluding the acquisition of public hospitals) in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and Hainan Island. Specific conditions, requirements, and procedures for setting up wholly foreign-owned hospitals will be notified separately. HAITONG INT'L believes that the previous pilot in the Shanghai Free Trade Zone in 2013, this expansion of opening-up reflects China's determination to further open up the medical field and service industry. Foreign-funded hospitals may supplement the supply of high-end medical services in China, and they will have higher requirements for the level of medical informationization, which is expected to drive medical IT construction demand. Risk warning: Risks of missing company large orders in data statistics and statistical errors; Policy advancement falling short of expectations; Industry demand falling short of expectations; Intensified industry competition.