Text | 【Finance reporter】 Zhang Xinpei

Edit | Lu Ling

"Now I receive a lot of calls every day to buy a ventilator. The company has been in existence for 17 years, and this is the first time I have encountered such a situation." Zhang Xue, who works for a medical device company in Nanjing, told Caijing. A customer from Bergamo, Italy, wants to buy a ventilator, hoping to give him a few, but she is really powerless. The company's production capacity has been maximized, and a batch of orders are rushing to be delivered.

Bergamo is the most affected city in Italy. With the increasing number of critically ill patients, ventilators have become their life-saving machines without specific drugs.

On March 27, the British Prime Minister Johnson's New Crown Virus tested positive. It is reported that US President Trump called for condolences. The first sentence Johnson said was "We need a ventilator." New York Governor Andrew Cuomo said: "The key is ventilator, ventilator, ventilator. This is the most important Urgent need. " He said the state "has arranged for people in China to purchase ventilators."

The development of overseas epidemics has exceeded expectations, the medical supplies gap has been alarmingly large, and life-saving ventilators have fallen into a global shortage. As an important ventilator manufacturer in the world, all countries in the world come to China to snap up ventilator.

As of press time, there were more than 660,000 confirmed cases of new coronary pneumonia worldwide and more than 30,000 deaths. According to the latest data, there are more than 580,000 confirmed diagnoses abroad. There are 486,048 confirmed diagnoses and 27,489 deaths. Among them, the cumulative number of confirmed cases in the United States reached 122,666. Italy has confirmed a total of 70,065 cases and 10023 deaths, with a mortality rate of 14.31%, ranking first in the world.

According to the American Academy of Critical Medicine, a total of 960,000 patients in the United States will need to use ventilators due to infection with the new crown virus, but there are only about 200,000 in the United States. In Italy, where the epidemic caused the most deaths, severe shortages of ventilators have forced doctors to give up on treating some patients.

Li Kai, Assistant Chairman of Yi'an Medical, said: "No country in the world doesn't want to buy a ventilator from China immediately. We have thousands of orders waiting to be delivered. The question is how quickly can we produce these breaths machine."

But even if the Chinese factory is full, it will be difficult to meet the demand for ventilators overseas. According to a reporter from Caijing, orders for some large factories have already been lined up to June and July, and orders for small factories are also very tight. The shortage of raw materials and poor logistics have affected the production speed of the ventilator.

Under the increasing shortage of ventilator, countries began to encourage enterprises to transform production of ventilator.

Orders cannot be completed, production scheduled to June
Throughout the morning of March 26th, Liu Ming was looking for ventilator manufacturers who could immediately deliver goods. "The buyer is the Spanish government, and they plan to take the flight from Baiyun Airport the next day back to China. I just contacted a company that might have the goods, but it was too late to prepare the contract, customs declaration and other materials." Liu Ming told Caijing reporter .

As a result of the negotiations, the Spanish government officials picked up the goods at the factory themselves, and the factory was not responsible for all other procedures. But even so, they still did not get the goods. Because 100 units have been sold the previous night.

According to British media reports, the number of ventilator in Italy can only meet less than a quarter of the demand. Faced with a rapidly increasing number of patients and unusually scarce medical equipment, they are going all out to find a ventilator in China.

On March 25, the Spanish foreign bank urgently purchased 2,000 non-invasive ventilators and 400 medical oxygen generators from Yuyue Medical (002223.SZ); on March 24, the first batch of 145 ventilators of Yi'an Medical has begun Departed for Serbia; On March 19, Andrew Cumer, Governor of New York State, stated in a press conference that New York urgently needed more than 20,000 ventilators and had sent people to China to purchase them.

"Now the orders are basically all exported. The most frequently asked questions are European countries with severe epidemics, such as Italy and Spain. But there is no way, the orders are really inexhaustible." Zhang Jun, a medical device distributor, told Caijing.

According to the data of Tianyan Inspection, there are currently 50 companies in China that are in business and whose business scope includes ventilator. Among the larger ones are Yi'an Medical, Mindray Medical (300760.SZ), Yuyue Medical (002223.SZ), and Aerospace Changfeng (600855).

Yi'an Medical recently said that since the global outbreak, it has received emergency ventilator procurement projects in 35 countries and regions including Italy, Britain, Germany, Russia and Serbia.

"The buyer I came in contact with most is the ICU ventilator, which is mainly for severe cases." Liu Ming said. However, some medical device distributors told reporters, "Some buyers, regardless of portable or ICU, as long as they have stock."

"Finance" reporter learned that most orders came from governments. "Basically, governments of all countries hold approvals to buy, but now we will not accept them even if there are approvals. The list has already arrived in June or July, and production cannot be reached." Mindray medical staff told reporters.

The global demand for Chinese ventilators is rising sharply, and some countries in South America have also begun to join the team to buy ventilators.

"Before last week, consulting customers were mainly in European countries with severe outbreaks in Italy and Spain. But from this week, many South American countries, including the Middle East and some African countries, have also started to consult to buy ventilators." Zhang Xue Tell a reporter from Caijing.

Since the global epidemic is accelerating, Zhang Xue has been taking many purchase consultation calls every day. "Almost every customer is talking to me, can you even distribute a few of them first, the delivery time is too long, they can't wait. But I really can't help it, the order is too full." Zhang Xue said.

"The export of medical devices must meet local qualifications. For example, the United States requires FDA and European standards require CE. There are not many manufacturers that meet the standards. At present, the epidemic is so serious that it must meet the requirements, and the supply must be insufficient. The merchant said.

According to a reporter from Caijing, in order to meet the needs of ventilators, some countries and regions are relaxing the relevant entry requirements.

"Our original market was mainly in Africa, mainly because we did not have the FDA and CE certificates required by Europe and the United States. We have had CE before but it has expired. However, from the situation in these days, restrictions may be relaxed in some places. For example Although our CE has expired, we have an ISO certificate, other certificates are also available, and the policy has been relaxed. "Zhang Xue told reporters.

On March 26, Zhang Xue received a call from the Chinese Embassy in the United States to purchase a ventilator. "The other party said that the United States does not require the FDA anymore. In fact, there are not many domestic manufacturers that meet the certification requirements. They are now so strict that there is little choice. The status quo is that it is difficult to get goods without certification requirements, let alone Mention various certificates. "Zhang Xue said.

In fact, recently, major epidemic countries or regions such as Europe and the United States have also released temporary or emergency measures for the prevention and control of materials to relax access requirements.

For example, the European Commission published recommendations in the Official Journal of the European Union for compliance assessments and market surveillance procedures for medical devices and personal protective equipment (PPE) during the outbreak. Including protective products purchased by official or authorized agencies of EU member states may not have the CE mark, but they can only be used by medical personnel and cannot be sold on the local market.

The U.S. Department of Health and Social Services (HHS) has announced the need to allow manufacturers or strategic reserve agencies to provide expired respirators or respirators with unknown quality assurance periods that exceed EUA use authorization periods (for example, N95 in state or local strategic inventory). FDA applies for emergency use authorization for respirators. Recently, the US FDA has issued emergency use authorizations for two products.

Shortage of components and poor logistics restrict production capacity
The global demand for ventilator surges. As the most important supplier, China's ventilator factory is operating at full capacity and full production, but even so, it is far from meeting the demand.

"Our order has been scheduled until May and June, and it is now produced continuously 24 hours a day. But the order is still unavailable." A medical device dealer told reporters, "We have not cooperated with major manufacturers recently, they Orders are too saturated, and the schedule is very far away. Large factories are mainly receiving government orders, and those that are not available will be queued to some small factories. "

According to a reporter from Caijing, the schedule of most factories has already reached May and June, and some well-known brands have a longer schedule. "Now it's impossible to take a weekend break, especially when you need to work 24 hours a day when the time is particularly tight. The order has been scheduled to July, and the new customer's order is no longer accepted." Zhang Xue said.

According to Yi'an Medical, after meeting domestic demand two weeks ago, the company's production line has been working hard to meet the demand for overseas ventilator orders. Workers implement a three-shift system, and R & D personnel are on the production line, and the machine is constantly running.

All ventilator manufacturers in China are racing against time to make ventilator, but there are still some problems that cannot be solved. "Finance" reporter learned that the current production difficulties are mainly due to the shortage of key components and logistics obstacles.

"We have some accessories that need to be imported from Europe and Germany, but due to the impact of the epidemic, the flight is uncertain and the delivery time is uncertain." Zhang Xue said, "On the other hand, the supply of raw materials is also very tight. All ventilator manufacturers are in Grab these original parts, in the end, each manufacturer can get very few goods. "Zhang Xue told reporters that if the parts can keep up, most of the production problems will be solved.

Another medical device manufacturer also told reporters that the current limited production speed is due to lack of parts. "We have a part that needs to be imported from Japan, but now there are very few flights and logistics is not smooth. If the parts are not available, the ventilator will be difficult to assemble." The source said.

Earlier, the person in charge of Yi'an Medical also said that the biggest shortcoming at present is that the core components are dependent on imports, and the supply is short and unstable.

On March 26, Yuyue Medical said that even if the company had done a lot of supply chain stabilization and expansion work before and during the epidemic, the capacity of the ventilator was still subject to the supply of raw materials from upstream manufacturers. The company will continue to increase resources for anti-epidemic products and do everything possible to improve production efficiency.

The poor logistics not only affects the supply of ventilator parts, but also affects the normal delivery of the ventilator.

"We are currently doing some shipping preparations, but we have also got some bad news. Firstly, freight rates have increased. Customers generally use air freight. The cost of air freight will increase by two to three times. Second, there are some local flights. The outage caused difficulties in arriving the goods. We are also working hard to find solutions with our customers. "Zhang Xue told Caijing.

The world has come to China to look for ventilators, and Chinese ventilator factories are going all out to produce, but the problem is that this demand has far exceeded China's maximum production capacity.

Soaring prices are in stock
Buying Chinese ventilators around the world, some people started to take the opportunity to get started.

At more than 4 pm on March 24, Hu Xia drove for two hours to the door of a company that produces ventilator in Nanjing. He heard the news that there were many buyers at the company's door to come to grab the ventilator, but the company's ventilator was out of stock. Hu Xia has several stocks in hand, and he wants to take the opportunity to find buyers.

Due to the nature of his work, Hu Xia has been in touch with overseas customers before. With the spread of overseas epidemics, consulting him more and more to buy Chinese masks, he began exporting masks. But now, the most frequently consulted is the ventilator. "Someone from South America, Germany, and India came to me to buy a ventilator," Hu Xia told Caijing.

Recently, Hu Xia is basically contacting buyers every day, and then looking for suitable sellers in China. Increase the price for profit. "The profit of the ventilator is much higher than the mask." Hu Xia said.

Under tight demand, the price of ventilators has skyrocketed. "The normal price of a ventilator is $ 20,000, but the quote from a dealer has reached $ 36,800 per unit," a ventilator buyer told Caijing.

Zhang Xue also expressed to reporters that he was surprised by the soaring prices. "We have a ventilator that sells for $ 9,300, but the dealer's offer has reached 250,000 yuan. Now we have no goods in hand. Some dealers have stocked some goods before," Zhang Xue told reporters.

The reporter learned that a simple ventilator model ACM812A usually sells for about 50,000 yuan, but on March 28, some dealers quoted a price of 150,000 yuan per unit, and only for that day. "If you want to spot, the price is 300,000 yuan per Taiwan." The source told reporters. And this ventilator only has basic breathing support function.

But the status quo is that 90% of buyers don't care about the price. As long as there is stock, it is the king.

"All quotations are valid on the same day. If you don't hear back for an hour, it will be out of stock. If you need to, you will pay for the deposit within 1 hour, and it will be out of stock for later. The price will be more expensive the next day." Hand said.

Due to the existence of a large number of middlemen, the current price of ventilator is very chaotic. "A lot of inquiries are made every day, but in fact many of them are repeated inquiries, I feel the market is more chaotic." Zhang Xue told reporters.

Changes in supply and demand have led to changes in ventilator prices. "The manufacturer knows the current market situation and will determine the price according to the condition of the accessories and market demand. Now the price is basically changing every day." A dealer said.

According to "Financial and Economics" reporters, the current price increase of ventilator is at least 50%. Reasons for the rise include rising component prices, rising labor and logistics costs, and some stockpiles.

"We only raised the price by 50% yesterday and had to adjust it. Because raw materials have risen sharply, some raw materials have even increased several times. And workers continue to work overtime, and labor costs are also rising." On March 28, a ventilator manufacturer People told reporters that the same model, different budgets, will have different prices.

And those who stockpile stocks use information asymmetry to disrupt the price of the ventilator market.

Yu Jian Medical's secretary Chen Jian said in an interview with the media that someone once called and asked for 5,000 ventilators. "This amount is too large and not normal." Chen Jian said that the company will recognize the order, but some people will still get approval to order, and the financial strength is very strong. "Later, after our investigation, we found that there were real estate developers behind these orders. It is difficult for us to prevent some ventilators from flowing into the market and becoming speculative financial products." Chen Jian said.

Huge gap encourages enterprises to transform production of ventilator
The development of overseas epidemics has exceeded expectations, the material gap has been alarmingly large, and life-saving ventilators have fallen into a global shortage. As a result, overseas countries have also begun to learn from China, and have mobilized enterprises to transform the production of ventilator. Among them, car companies have become the main force of transformation.

A few days ago, according to the re-launched "National Defense Production Law", the United States forced the two American auto manufacturing giants, GM and Ford, to cross-border production of ventilator. The U.S. federal states that General Motors promises to produce 40,000 much-needed ventilators soon.

On March 19, Tesla CEO Musk said on social media, "If there is a shortage of medical equipment in the United States, Tesla will also produce ventilators." On the 21st, Musk again said that the company has already