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Dehaier Medical Systems (DHRM) Capitalizes on its Focus Shift to mHealth via Strategic $20M Deal

According to a report published late last year by MarketsandMarkets (http://nnw.fm/3tgzS), the global mHealth (mobile health) solutions market is on track to hit upward of $59 billion by 2020, growing at a CAGR of around 33.4 percent. Some of the most obvious drivers here are mobile device (as well as 3G/4G network) proliferation/penetration rates, the accelerating transition to outcomes-based and patient-centric healthcare delivery and the rapidly mounting utilization of connected mobile devices within global healthcare systems in order to better manage/reduce costs associated with chronic diseases. One place this continuum of drivers is particularly evident is in the world’s largest smartphone market, China, where there were 1.28 billion mobile phone users as of May of this year.

An operator like Dehaier Medical Systems Ltd. (NASDAQ: DHRM) is a good pick here, given the company’s established footprint in the Chinese market, international reach, and strong presence in healthcare wearables and hospital wireless solutions. Dehaier spent most of 2015 drawing down the lion’s share of its traditional medical device business (including assembling and selling a wide variety of devices) and shifting into mHealth vectors, essentially just salvaging the company’s most complementary segments like wearables, sleep respiratory, and hospital wireless solutions. Dehaier is shrewdly trimming the unprofitable fat here, but will continue to maintain a small handful of its most valuable medical device vectors where it has key patents, all while maintaining a forward trajectory that is solidly grounded in the burgeoning mHealth market.

The Asia-Pacific region (China and India in particular) is set to see the most substantial upside as mHealth proliferation continues to rise alongside mobile penetration (smartphone penetration is already at 58 percent in China, according to Pew Research (http://nnw.fm/D5cLN)) and a more recent projection by P&S Market Research gives an even more favorable 34 percent CAGR figure (http://nnw.fm/KaRo2) for the Chinese mHealth market over the next four years. Little wonder then that Dehaier entered a definitive securities purchase agreement back in April (closed successfully August 22) with mobile platform wizards at publicly-traded Hangzhou Liaison Interactive Information Technology to not only shore up its strategic position in the regional mHealth market, but to lay hands on $20 million or so in order to really get the ball rolling.

This could spells big things for DHRM, which also executed a partnership in July with China Sciences Group to expand its sleep apnea presence into the Chinese pension/health market via CSG’s elder care platform, in conjunction with the simultaneous agreement between CSG and Chia Tai Pharmaceutical Group to bring forth a cloud-based health management platform solution for this market. DHRM also signed a strategic cooperation agreement only weeks later in July with Hongyuan Group’s Hongyuan Supply Chain subsidiary, designed to see Dehaier reach its end users more effectively via Hongyuan’s sales platform while Hongyuan benefits from distribution access to Dehaier’s wearable sleep apnea diagnostics tech.

For more information, visit www.Dehaier.com.cn/english

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