Investment Rating - The report maintains an "Outperform" rating for the brain-computer interface (BCI) industry [1] Core Insights - The brain-computer interface industry is rapidly developing, enabling direct communication between the brain and external devices, with significant advancements in technology and market potential [2][3] - China holds multiple advantages in developing the BCI industry, including technological leadership in non-invasive interfaces, a growing industrial base, and increasing market demand driven by an aging population and industrial upgrades [22][18] - The BCI technology involves four core steps: neural signal acquisition, signal processing and feature extraction, decoding and machine learning, and feedback and control [27][24] - The BCI industry has a complete supply chain covering upstream (materials, chips, electrodes), midstream (signal acquisition and processing), and downstream (medical health, consumer life, industrial production) applications [58][71] Summary by Sections Industry Investment Rating - The report maintains an "Outperform" rating for the BCI industry [1] Industry Overview - The BCI technology allows for a new communication channel between the brain and external devices, with applications expanding due to advancements in neuroscience and artificial intelligence [2][3] - The global BCI market is projected to grow from approximately $2.62 billion in 2024 to $2.94 billion in 2025, and is expected to reach $12.4 billion by 2034 [2] Technological Development - BCI technology is evolving through three main paths: invasive, semi-invasive, and non-invasive methods, each with distinct advantages and applications [28][30] - Invasive interfaces provide the most precise neural signal acquisition but come with higher risks, while non-invasive interfaces are safer and more user-friendly [41][45] Market Applications - The BCI industry is witnessing rapid growth in various application scenarios, including medical rehabilitation, consumer electronics, and industrial production [58][71] - The medical health sector is currently the largest application area for BCI technology, accounting for approximately 47.62% of the market, with significant potential in rehabilitation and neurodiagnostics [71]

Core Insights - Nanjing Shanhai Medical Technology Co., Ltd. has received approval from the National Medical Products Administration for its brain-computer interface medical device "Mingtong," marking it as the first domestically approved Class III medical device in this category [1][2] - "Mingtong" serves as a high-end electrophysiological device used in functional neurosurgery, enabling real-time collection, localization, and modulation of deep brain signals during deep brain stimulation (DBS) surgeries [1][2] - The device is designed to replace imported products, providing precise identification of target areas and reducing risks associated with previous reliance on imaging techniques [2] Company Overview - Shanhai Medical is a national high-tech enterprise focused on solutions for brain diseases and brain science, with a comprehensive capability from technology development to clinical promotion [3] - The company collaborates with top medical institutions and universities to drive technology implementation and aims to establish a self-controlled digital diagnosis and treatment ecosystem for brain diseases [3] Product Features - "Mingtong" features multi-mode stimulation capabilities, allowing for personalized adjustments based on patient conditions, and collects patient data for clinical optimization [2] - The device incorporates advanced technologies to overcome challenges such as interference in hospital environments, ensuring safety and rapid signal recognition [2] - The development team has addressed unique medical device challenges, including electrode material selection and sterilization methods, through extensive testing [2]