Soochow: Increasing Emphasis on Brain-Computer Interfaces, Initial Success in Commercializing Non-Invasive Brain-Computer Interfaces

Soochow released a research report stating that China's emphasis on brain-computer interfaces has further increased, with policy support increasing investment. Although invasive brain-computer interfaces still require some clinical validation time before mass commercialization, non-invasive brain-computer interfaces have already shown early effectiveness in commercialization. Relevant departments such as the Ministry of Industry and Information Technology have issued policies emphasizing the importance of developing brain-computer interface technology, and it is expected that brain-computer interface companies will continue to make breakthroughs in technology and the market as technology iterates rapidly. Key points from Soochow are as follows: Brain-computer interfaces allow electronic devices to communicate directly with certain parts of the brain. A brain-computer interface is a technology that establishes a communication and control channel between the brain and external devices, using the brain's bioelectric signals to directly control external devices, or using external stimulation to regulate brain activity, thereby enhancing, improving, and extending brain function. According to the location of electrode implantation in the brain during brain signal acquisition, brain-computer interfaces are mainly divided into three categories: non-invasive, semi-invasive, and invasive. Most brain-computer companies in China currently choose the non-invasive technology route. Invasive brain-computer devices are currently in the clinical research and animal experimentation stage. Increased policy support: China's emphasis on brain-computer interfaces has further increased. In January 2024, the Ministry of Industry and Information Technology and seven other departments issued the "Implementation Opinions on Promoting the Development of Future Industry Innovation," listing brain-computer interfaces as one of the top ten innovative products. The future will focus on brain-computer interfaces and other professional fields to formulate special policy documents, proposing breakthroughs in key technologies and core devices such as brain-computer integration, brain-like chips, and brain computing neural models, and developing a batch of user-friendly and safe brain-computer interface products. Currently, brain-computer interfaces mainly land as non-invasive applications. Non-invasive commercialization is rapidly taking off. According to PrecedenceStatistics data, the global brain-computer interface market was $23.5 billion in 2023, expected to reach $108.9 billion by 2033, with a compound annual growth rate of 16.55% from 2023 to 2033. As of 2021, the military application of brain-computer interfaces accounted for 25% of the total global brain-computer interface applications, highlighting the strategic significance of brain-computer interface research. Some wearable devices for improving attention, sleep, and devices for controlling exoskeletons for medical rehabilitation have already been commercialized. The market space for non-invasive brain-computer interface products is very large. We estimate that even with a 1% market penetration rate, the potential space for the sleep device category alone could exceed 15 billion yuan. Invasive brain-computer interfaces have entered the clinical trial stage and are expected to undergo intensive catalysis. The research and development of invasive brain-computer interfaces have entered the clinical trial stage, with multiple technical routes. Overseas, new generation implant solutions such as Neuralink's flexible electrodes and Synchron's intravascular implant solutions are mainly in clinical trials. In July 2024, Musk outlined Neuralink's goal of implanting 1000 brain chips by 2026. Domestic efforts have also begun. In November 2024, Borui Kang cooperated with the team of Professor Hong Bo from the Biomedical Engineering Department of Tsinghua University to develop the brain-computer interface product NEO, which completed the third national and first Shanghai clinical trial implant surgery at Huashan Hospital, affiliated with Fudan University. The team expects to conduct 30-50 brain-computer interface clinical trials in 10 centers nationwide in 2025, and the industry is expected to undergo intensive catalysis. Investment recommendations and related targets The brain-computer interface industry chain has not yet formed a mature division of labor. Self-developed BCI chips and algorithms are core technological barriers. Most companies provide complete solutions. It is recommended to pay attention to listed companies that have a leading layout in brain-computer interfaces, such as Shanghai Stonehill Technology (002195.SZ), Beijing Chieftain Control Technology Group (300430.SZ), and Sanbo Hospital Management (301293.SZ). Risk warnings: Policy progress is slower than expected, and technological development is slower than expected.