BoC International: Three major technologies advancing together, optimistic about the potential growth space of the brain-machine interface industry.

Bank of China International released a research report stating that the brain-machine interface industry is at a crucial stage of breakthrough from laboratory technology to commercialization. The three major technology pathways are rapidly advancing, and the market size is expected to expand rapidly. The industry chain is gradually being established and improved, with high barriers for core upstream devices, and the largest space for medical applications downstream, with the long-term potential for upgrading from the billion-level to the trillion-level. Related policies continue to be strengthened, commercialization significantly speeds up, and the bank continues to be bullish on the potential growth space of the brain-machine interface industry, recommending focusing on it. Bank of China International's main points are as follows: The prospects of the brain-machine interface market are broad, with three major technology pathways advancing in parallel The brain-machine interface industry is at a crucial stage of breakthrough from the laboratory to commercialization. Looking at the specific technology pathways, invasive BCI requires surgical implantation of devices into the brain, with complex operations and higher risks, but high signal fidelity. Non-invasive BCI, on the other hand, does not require surgery and is rapidly popularized due to its safety and ease of use, widely used in medical diagnosis to consumer electronics and other fields. Semi-invasive BCI only requires minimal surgical intervention, bridging the gap between invasive and non-invasive technologies. In terms of market share, invasive BCI has a relatively low market share of about 7% due to high technological barriers, while non-invasive BCI has the highest market share at around 78%, and semi-invasive BCI accounts for about 15% of the market. According to data from the China Industry Research Institute, the global brain-machine interface market is expected to increase to $3.3 billion by 2026, and the domestic brain-machine interface market will reach 4.6 billion yuan. As brain-machine interface technology continues to break through, relevant downstream industrial applications are rapidly landing, and the brain-machine interface market is expected to accelerate in capacity expansion and achieve high-speed growth. The brain-machine interface industry chain is gradually improving, with great potential in downstream applications markets Brain-machine interface industry chain: High technological barriers in the upstream, key to industrialization in the middle, and great market potential in the downstream. In terms of the distribution of value in the brain-machine industry chain, the core devices such as electrodes and chips in the upstream build high technological barriers, representing the high-value territories of the industry; system integration and solutions in the middle are the key central hubs for transforming technology into products; diversified applications in the downstream are the core engines for industry growth. As the downstream application segments mature, the market is expected to grow from the billion-level to the trillion-level. In terms of downstream applications, the medical and health fields are growing the fastest. According to estimates by McKinsey, the global market size of brain-machine interfaces in the medical application field is expected to reach $40 billion in 2030, surpassing $145 billion by 2040, demonstrating great market development potential. Combining policy support and capital drive to accelerate the commercialization of the brain-machine interface industry Driven by national strategy and industrial policy, the commercialization of brain-machine interfaces is significantly speeding up. The "Thirteenth Five-Year Plan" proposed to include brain-machine interfaces as one of the six future industries that require forward-looking layout, greatly enhancing the industry's strategic position. The "Implementation Opinions on Promoting the Innovative Development of the Brain-Machine Interface Industry" jointly issued by seven departments including the Ministry of Industry and Information Technology further established the "two-step" strategic blueprint and development path for the industry by 2030. In critical commercialization stages, supporting policies have been successively implemented. The National Medical Products Administration has included "Implantable Brain-Machine Interface Medical Devices" in the "Priority Approval Catalog for High-end Medical Devices," shortening the product launch cycle. The National Healthcare Security Administration and local healthcare security departments have successively formulated brain-machine interface medical service price items, providing clear fee standards. From top-level industry planning and accelerated approvals to hospital-side fee-related policies, efforts are continuously being intensified to accelerate its commercialization process. At the same time, the brain-machine interface industry is experiencing a financing boom, with the National Venture Capital Guiding Fund listing brain-machine interfaces as a key investment area. Since 2026, brain-machine interface companies have continued to be active in financing, with companies such as Strong Brain Technology and Ladder Medical receiving large amounts of funding, driving the acceleration of the industrialization of brain-machine interfaces. Investment advice The bank believes that the brain-machine interface industry is entering a period of rapid development, with non-invasive technology relatively mature and gradually entering the commercialization phase. It is recommended to focus on companies whose products have been approved, have clear commercial models, and are gradually generating income in medical rehabilitation or consumer health fields, such as Xiangyu Medical, Nanjing Vishee Medical Technology Co., Ltd, Nanjing Medlander Medical Technology, Cofoe Medical Technology, Jiangsu Apon Medical Technology, Innovative Medical Management, Beijing Chieftain Control Technology Group, and Strong Brain Technology (unlisted). Invasive/semi-invasive technologies have relatively high barriers, and it is recommended to focus on technological breakthroughs and clinical progress, with a strong accumulation in core areas such as flexible electrodes, large-scale brain models, or processes, and companies with gradually validated clinical applications, such as MeHow Innovative, Hangzhou Biotest Biotech, Heart Clear Medical, Borui Kang (unlisted), Ladder Medical (unlisted), and CoreFit (unlisted). Main risks faced by the rating Risks of risk of technical and product approvals, uncertainty in the launch of research products, policy uncertainty risks, and ethical and data regulation risks.