Oriental Securities: Household ventilators are growing steadily, industry leaders are leading the development
The Zhitong Finance App learned that Orient Securities released a research report saying that it is optimistic that demand for home respiratory treatment will continue to grow, the repurchase value of consumables will increase, and the industry opportunities brought about by the expansion of leading international players. It is recommended to focus on: 1) companies with a complete layout of hosts, masks and accessories, which can rely on equipment installation to expand the repurchase of patient consumables; 2) independent brand enterprises with overseas registration, channel coverage and localization service capabilities, which can extend product sales to long-term patient management; 3) Deeply enter leading international supply chains and have advantages in technology, yield, and large-scale delivery in high-frequency consumables such as liquid silicone masks and precision structural parts. Investment targets Remite (301367.SZ, purchase) and Beautiful Healthcare (301363.SZ, purchase).
Orient Securities's main views are as follows:
Event: In August 2026, ResMed published its 2026 annual report (corresponding to the natural year June 30, 2025 to June 30, 2026), achieving revenue of US$5.65 billion (+10%) and net profit of US$1.52 billion (+9%).
Demand remains resilient, concerns about potential GLP-1 shocks weaken
2026H1, Eli Lilly's Zepbound sales reached 9.09 billion US dollars, an increase of 60% over the previous year, and GLP-1 weight loss drugs are still being sold rapidly. Meanwhile, ResMed's 2026 equipment revenue increased 7% at a fixed exchange rate, mainly driven by increased demand and sales volume. The bank believes that the rapid penetration of GLP-1 occurred at the same time as the increase in sales of PAP equipment, indicating that previous market expectations about the demand for weight loss drugs to replace household ventilators were pessimistic. Zepbound is currently mainly suitable for patients with moderate to severe obstructive sleep apnea associated with obesity. It takes time to lose weight and improve the condition, and some patients still need to continue using PAP devices. Drug promotion may also increase OSA awareness, screening rates, and number of confirmed cases. GLP-1 is more likely to change treatment combinations for some patients, increasing demand for household ventilators rather than causing demand to shrink.
Consumables continue to grow faster than consoles, and the importance of repurchasing patients is increasing
In the 2024-2026 fiscal year, ResMed equipment revenue increased 7%, 9%, and 7%, respectively, at a fixed exchange rate, while revenue from masks and other products increased 13%, 11%, and 12%, respectively, faster than the equipment side for three consecutive years. The bank believes that as the number of PAP equipment holdings continues to expand, the growth momentum of the industry is gradually expanding from sales of new equipment to the long-term repurchase of consumables for patients. Compared with hosts with a long replacement cycle, consumables such as masks, piping, and filters have the characteristics of high frequency of use and short renewal cycles, and are relatively more stable and sustainable. Therefore, the focus of industry competition will be further extended from simply acquiring new patients to improving treatment compliance, improving wearing comfort, and establishing a continuous supplementary service system, and the importance of a single patient's entire life cycle value will rise accordingly.
Leading expansion drives upstream orders, and high-quality suppliers are expected to benefit
ResMed's expenditure on purchasing property, plant and equipment in FY2026 was US$160 million, up 74% year over year; non-GAAP gross margin increased 2.4 percentage points to 62.4% for the whole year. The improvement in gross margin was mainly due to productivity improvement projects. The bank believes that leading companies continue to invest in production and operation infrastructure to support upstream demand for liquid silicone components, precision structural parts, etc., but the simultaneous improvement in gross margin means that their requirements for supplier cost reduction, yield, and delivery efficiency have also increased accordingly. As international leaders continue to expand capital investment and promote production efficiency optimization, upstream supplier competition will further focus on cost control, product yield, delivery stability, and collaborative development capabilities, and enterprises with advantages in automated production and large-scale manufacturing are expected to gain more order share.
Risk Alerts
The increase in the global sleep apnea diagnosis and treatment penetration rate fell short of expectations; overseas medical insurance reimbursement policies and consumables supply cycle adjustments; and risks such as a decline in product prices and profitability due to increased competition in the industry.