Ask AI · How does Wei Gao capture three growth curves after acquiring Weigao Purui?

Produced by | Bullet Finance

By | Wenhua

Edited by | Shandian

Visual design | Xing Jing

Reviewed by | Songwen

On March 28, Wei Gao Blood Purification (股票代码：603014), a leading domestic blood purification company, delivered its first full-year set of results since listing on the A-share market.

The financial report shows that, during the reporting period, Wei Gao Blood Purification achieved total operating revenue of RMB 8B, up 4.57% year over year; net profit of RMB 482 million, up 7.33% year over year; and non-GAAP net profit of RMB 464 million, up 5.66% year over year.

Against the backdrop of market-wide expectations that, in 2025, profit in the hemodialysis sector will face pressure due to the “volume-based procurement” (VBP) “baptism,” Wei Gao Blood Purification’s gross margin was 40.23%, down 2.06 percentage points year over year. Although the gross margin dipped slightly, driven by multiple factors such as technological innovation, lean production, and overseas expansion, it managed to stabilize its profit base, delivering a notably resilient set of results.

Behind these results are Wei Gao Blood Purification’s long-term accumulation and gradual release—and strong evidence of its ongoing efforts to further consolidate its market position in the blood purification industry.

1. Turn the “pain” of VBP into growth dividends

In 2025, the domestic hemodialysis industry has gone through multiple rounds of VBP “baptism.” For example, a cross-provincial VBP for hemodialysis consumables led by Henan saw an average price reduction of 48.51%. Then, the Beijing-Tianjin-Hebei “3+N” alliance VBP for hemodialysis consumables achieved an average cut of 55.23%, with some products seeing reductions of more than 65%.

Industry profits are generally under pressure, but Wei Gao Blood Purification’s gross margin fell from 42.29% in the same period last year to 40.23%, a slight decline. But under the impact of VBP, being able to keep the gross margin drop within such a narrow range is itself a reflection of the company’s resilience.

Why did Wei Gao Blood Purification withstand the pressure?

Scale effects are the first line of defense for Wei Gao Blood Purification against pricing shocks. Data from Frost & Sullivan shows that in 2023, Wei Gao Blood Purification’s market share in the domestic hemodialyzer field was 32.5%, and in the domestic hemodialysis tubing market it was 31.8%, ranking first in both categories across the whole industry. In terms of market coverage, its products reach 31 provinces nationwide and more than 6,000 customers, including over 1,000 Tier-3 hospitals.

Its massive customer base and production scale give it obvious advantages in raw material procurement, manufacturing, and logistics and distribution. Even in the context of the industry’s profit decline after VBP policies, the cost dilution capability brought by scale effects provides important support for cushioning the gross margin downturn.

Optimizing the product mix is also a key factor in stabilizing Wei Gao Blood Purification’s gross margin. While VBP puts pressure on low-end products, Wei Gao Blood Purification, leveraging its high-end product lines with high technological barriers, maintains relatively stronger pricing power.

As one of the domestic manufacturers that achieved breakthroughs in hemodialysis hollow-fiber membrane technology, Wei Gao Blood Purification spent years tackling the challenge, successfully breaking through the hollow-fiber membrane technology barrier. It has developed a full range of products covering low-flux, mid-flux, and high-flux, as well as hemodialysis filters. In key performance indicators such as clearance rate, ultrafiltration coefficient, and sieving coefficient, it reaches or exceeds international brands such as Fresenius and Baxter. Its hypersensitivity rate has been reduced to 0.3% (the average for imported products is 0.8%).

For example, its EH-series products are superior to imported products in clearing β2 microglobulin (uremic toxins). Hemodialysis filtration (HDF): the company’s HDF series products for patients with hyperphosphatemia have completed clinical validation. After上市 in 2026, they will fill the domestic gap, with a target annual sales volume of 1 million units.

Product advantages translate into tangible revenue. The financial report shows that, in 2025, revenue growth year over year was achieved in all three categories of supplies/formulations, medical devices, and other medical products. Among them, medical devices generated RMB 741 million in annual revenue, with a year-over-year growth rate of 18.91%.

(Figures / CGT, based on the VRF agreement)

Operational resilience is also reflected in cash flow. During the reporting period, Wei Gao Blood Purification’s net cash flow from operating activities was RMB 794 million, up 38.69% year over year. The cash collection capability of core business clearly improved. By the end of 2025, the company held cash and cash equivalents of RMB 3.77B, with ample funds on hand.

Healthy cash flow and a solid financial structure have become important safeguards for the company’s technology investments and market expansion during the industry’s adjustment period.

In addition, technological innovation is another key “bottom card” for Wei Gao Blood Purification to respond to industry changes. During the reporting period, its total R&D spending was RMB 144 million, accounting for 3.82% of operating revenue, providing strong support for product upgrades and technology breakthroughs.

Sustained R&D investment has produced fruitful results. Wei Gao Blood Purification has nearly 500 R&D personnel and has built a complete R&D technical system. In terms of patents, as of the end of the reporting period, it had accumulated more than 300 authorized patents, including a steady increase in the proportion of invention patents.

Lean production: In 2025, Wei Gao Blood Purification steadily advanced phase-two projects of its production digital operations platform and energy platform. By empowering operations with digital technologies, it enabled more scientific control over labor and energy costs.

2. Hit the industry’s key beats—growth engines are even stronger

While maintaining a stable core business base, Wei Gao Blood Purification is seeking the durability of growth momentum—which requires it to precisely capture industry opportunities.

In the “slow business” of hemodialysis, Wei Gao Blood Purification has already caught multiple key industry timing points.

Improving treatment penetration is the most certain long-term logic in the hemodialysis market. Industry data shows that China has about 4.13 million end-stage renal disease (ESRD) patients, but only 1.07 million receive dialysis treatment, resulting in a dialysis treatment rate of just 26%.

Frost & Sullivan predicts that by 2030, China’s hemodialysis and peritoneal dialysis treatment rates among ESRD patients are expected to rise to 54.29% and 7.53%, respectively. Even without considering growth in the total patient population, simply increasing treatment penetration would bring a doubling of growth potential to the hemodialysis market.

(Figures / CGT, based on the VRF agreement)

The core driver behind this increase in penetration is the ongoing improvement of医保 policy.

Since 2012, when the State Council categorized ESRD as a major-illness health insurance condition, related policies have been rolled out one after another and covered both urban and rural residents. In most regions nationwide, hemodialysis fees are charged in bundled form; in some areas, the reimbursement ratio can reach 95% or higher, greatly reducing the financial burden on ESRD patients.

With the rollout of health insurance policies, increased health awareness among patients, and improved technological levels of blood purification-related products, the number of newly added patients receiving blood purification treatment in China has maintained steady growth in recent years.

Among them, policy-driven support in lower-tier markets has opened up a new growth space for the hemodialysis industry. Recently, the National Health Commission released the 《Notice on Implementing 2026 Health and Wellness System People-Focused Service Projects》，requiring that every county with a resident population of more than 60k be able to provide hemodialysis services. As a result, nationally, 350 newly added township health centers and community health service centers will provide hemodialysis services. This means that the supply of hemodialysis services is shifting from first- and second-tier cities toward grassroots markets.

Wei Gao Blood Purification had already laid plans for this.

According to public information, Wei Gao Blood Purification’s product sales have covered 31 provinces, municipalities directly under the central government, and autonomous regions across China. Its channels span from first- and second-tier cities to third- and fourth-tier cities, and further into county towns and rural townships. It reaches everything from large Tier-3 hospitals to Tier-1 and Tier-2 hospitals, and then to community clinics and township health centers. This deep grassroots channel layout gives it the ability to respond quickly when policy dividends are released.

As product price cuts accelerate clinical penetration and, on top of that, new growth points emerge in grassroots markets, the hemodialysis market is expected to enter a new cycle of volume growth in 2026.

According to Frost & Sullivan data, from 2019 to 2023, the compound annual growth rate of China’s hemodialysis medical device market size reached 5.67%. It is expected to increase to RMB 8B by 2030. As an industry leader, Wei Gao Blood Purification is undoubtedly the most direct beneficiary of this growth cycle.

At the same time, overseas market expansion is another new growth point for Wei Gao Blood Purification. Relying on a mature sales network and a global strategic perspective, in 2016 Wei Gao Blood Purification initiated overseas expansion in a forward-looking manner. Today, its products have been exported to multiple countries and regions such as Europe and the Middle East. It lists Southeast Asia, South America, Eastern Europe, and North Africa as key markets, while markets in Europe, the US, and Japan are considered long-term strategic markets.

3. A new starting point and new valuation logic

The impressive financial results represent the past. The market is more focused on Wei Gao Blood Purification’s future potential—such as how to leverage its current profitability and cash flow advantages to transition from a hemodialysis-industry leader to a platform-type healthcare company.

In January this year, Wei Gao Blood Purification acquired 100% of Weigao Purui for RMB 8.5 billion. Weigao Purui is a leading company in China’s prefilled drug delivery system sector. From 2022 to 2024, its domestic market share for prefilled products exceeded 50% each year, maintaining the top position in the industry. In international markets, its sales ranked among the top five in the industry.

During the reporting period, Weigao Purui’s gross margin for prefilled products was far higher than the gross margin level of traditional hemodialysis consumables. The transaction comes with clear performance commitments. It shows that the net profit guaranteed for each year from 2026 to 2028 is approximately RMB 640 million, RMB 720 million, and RMB 784 million, respectively. This will provide strong support for profit growth for Wei Gao Blood Purification over the next three years.

And the significance of this acquisition goes far beyond just showing up in the financial statements.

From a business perspective, this is an extension along Wei Gao Blood Purification’s industry chain. Wei Gao Blood Purification has been deeply focused on the blood purification field for more than 20 years and has accumulated solid technical reserves in biomedically used membrane materials. Meanwhile, the prefilled drug delivery system sector that Weigao Purui operates in has extremely high requirements for the safety and stability of pharmaceutical packaging materials, and it also needs strong materials science and manufacturing process capabilities.

The combination, in essence, bridges Wei Gao Blood Purification’s technical accumulation in high-end medical materials with Weigao Purui’s market leadership in the pharmaceutical packaging materials sector.

From a market perspective, the merger can also enable deep synergy between both parties’ customer resources. Wei Gao Blood Purification’s service network covers more than 6,000 healthcare institutions in China, mainly in nephrology departments and dialysis centers. Weigao Purui’s customer base, however, is mainly pharmaceutical companies. With these complementary customer structures, effective mutual reinforcement can be achieved.

More importantly, based on both sides’ technological reserves and customer resources, Wei Gao Blood Purification clearly proposed in its reorganization report that it will jointly develop upstream biological pharmaceutical business markets focused on biologic drug filters.

Biologic drug filters are a key consumable in the production process of biologic drugs and have long been dominated by foreign brands, leaving a large space for domestic substitution. Therefore, opening up this market will allow Wei Gao Blood Purification to extend from a purely blood purification field into the upstream segment of the biologic pharmaceutical industry chain.

From a strategic positioning standpoint, this acquisition is precisely a marker for Wei Gao Blood Purification’s transition from a “hemodialysis leader” to a “platform-type company.” Previously, the market’s valuation of Wei Gao Blood Purification was mainly based on the growth potential of the hemodialysis track—i.e., the typical single-track valuation logic.

Meanwhile, in the pharmaceutical packaging materials track where Weigao Purui operates, prefilled drug delivery systems are a high-value-added product category with market growth rates higher than traditional packaging materials. At the same time, the market for biologic drug filters—which both parties plan to focus on in the future—will enter a period of rapid growth as China’s biologic pharmaceutical industry surges.

Thus, with the overlay of three growth curves, Wei Gao Blood Purification’s overall profitability and valuation level are bound to improve significantly.

Of course, all of this needs to be validated over time. But what can be confirmed is that Wei Gao Blood Purification is evolving from an industry leader focused only on blood purification into a comprehensive platform covering blood purification, pharmaceutical packaging materials, and biologic pharmaceutical consumables.

The platform’s room for imagination is far greater than that of a single hemodialysis track.