Domestic orthopaedic equipment listed companies 2 to 6 times the market growth of eight cents across the sea!

On September 10, 2019, Gaoyi Capital restocked orthopaedics, becoming its second largest shareholder with 350 million investment in Aikang Medical (01789.HK), and its share price has nearly tripled in more than eight months, and on May 12, 2020 it increased its holding of Kellett (300326.SZ) by 390 million yuan, making it the second largest shareholder of Kelleta.
this report lets us together from the 2019 annual report of orthopaedic medical device listed companies, fast-track development over the past year, but also from the perspective of industry development to look back at the reasons for the high-rise capital heavy orthopaedic circuit.
orthopaedics is the fourth largest circuit in the field of medical devices in addition to IVD, imaging, cardiovascular, according to the Southern Institute of Pharmaceutical Economics, China's orthopaedic implant supplies market size is expected to 29.7 billion yuan in 2019, compared with 2018 growth of 15.11%, is expected to 2019-2023 compound growth rate of 14.19 percent Around, and from the annual reports of eight listed companies, it is not difficult to find that the growth of domestic head orthopaedic medical equipment companies are all more than 31.30%, of which 6 revenue growth of more than 50% (including minimally invasive medical (00853.HK), the growth of the domestic market of minimally invasive more than 57%), net profit growth is also more than 25%-124%.
forecast the development trend of china's orthopaedic implant supplies market
. We believe that the main reasons are as follows:
- domestic product performance improvement. In recent years, with the progress of Chinese medicine, materials, production process and the introduction of international advanced clinical technology and concepts, coupled with the head orthopaedic company increased research and development investment year by year, and strengthen academic exchanges and product development cooperation with clinicians, greatly enhance disingenuously enhance the performance of products, but also for the development of more suitable Chinese group physiological structure and the convenient use of orthopaedic products by doctors laid the foundation.
- strong market access and business policies. Head Orthopaedic Skeletal Medical Is Faster at Product Registration, Access and Listing, and in marketing models, with more flexible business policies and channel strategies than imported brands, the Blue Sea market can sink more quickly.
- health insurance fees are favorable to domestic products. Throughout the past two years, the state in orthopaedic supplies tender and reduce the price of orthopaedic supplies to take a series of measures for the development of domestic enterprises also play a positive role in promoting. From the medical insurance reimbursement policy alone, the vast majority of provinces of the country's domestic orthopaedic supplies reimbursement ratio is higher than imported products, in the case of medical insurance control fees, hospitals will prefer highcost cost-effective domestic products for clinical surgery.
theof the top reimbursement policies in Beijing, Shanghai and Luoyang. -Band purchasing promotes healthy competition. The core value behind the volume purchase lies in saving the cost of medical insurance, squeezing the unnecessary profit margin in the middle link, and thus reducing the invalid and chaotic competition. This measure for the product line rich, product performance is good, innovation ability, operation norms of listed companies, reduce the cost of simply relying on sales to drive business, a healthy competitive environment is conducive to the development of listed companies. And small and medium-sized enterprises have a single product line, weak bargaining power, poor ability to resist risks, will be gradually marginalized and eliminated by the market.
-graded diagnosis and treatment to promote the accelerated development of primary care. The state's continued promotion of graded diagnosis and treatment is also one of the reasons for the rise in revenue of domestic head orthopaedic companies. As the target market of imported orthopaedic companies is mainly tertiary hospitals in developed cities, which itself is not sufficiently dynamic in the sinking market. And the state to implement graded diagnosis and treatment is to leave orthopaedic surgery in the local hospital, to the pursuit of cost-effective primary hospitals and patients, for domestic orthopaedic equipment companies to provide a broad blue sea market. Head enterprises have sufficient sales costs for the sales team to build and channel development, which is to achieve rapid sales growth is one of the important reasons.
reviewed the orthopaedic sector in 2019, with minimally invasive medical (00853.HK) in revenue topping the list (overseas revenue), with Viago (01066.HK) coming in second place, followed by Dabo Medical (002901.HK), Kelley Tai (300326.SZ), Aikang Medical (01789.HK) and Lichun Medical (0188.HK). In terms of market capitalisation growth, the rest of the company has more than doubled, with the exception of Aikang and Chunli, which have grown by at least once in the past year, by 55 per cent. Looking at the growth of these companies, the results are encouraging. In addition, on April 9, 2020, Sanyou Medical (688085.SH) successfully landed on the branch board, april 1 orthopaedic surgery robot Tianzhi Aviation Board meeting.
from the revenue data, each orthopaedic listed company achieved more than 30% growth performance, but the changein in net profit is different:
- Chunli and Aikang Medical's net profit growth mainly comes from the continuous expansion of sales scale and effective cost control.
-Kelly's net profit decline was due in part to negative sales growth due to restructuring of the acquired company Adier Trauma and Spine Products, and partly to the divestiture of the company's cardiovascular business.
- Dabo Medical's net profit growth rate is lower than revenue growth, partly due to the two-ticket system high open, if excluding the impact of the two-ticket system, it is expected that the trauma product line revenue growth will be retraced to more than 25%, the spine product line revenue growth will be retraced to more than 35%.
looking at the rapid development of listed companies above the path is not difficult to find, each company is from a division of orthopaedics in a sub-area, and then quickly expand to other sub-areas, intended to actively layout the whole orthopaedic business. On the one hand, they are developing their own built-up research and development and production platforms for endogenous development, on the other hand, they are also looking for a variety of external acquisition opportunities to accelerate the pace of expansion.
at the same time, because of the rapid coverage of the sales network and the rapid expansion of the sales organization, coupled with some provinces two-ticket system landing and sinking market training needs, the marketing costs of each company is also facing a high price rise, the above-mentioned listed company marketing costs accounted for more than 19% of revenue, Sanyou Medical and Tianzhi Airlines sales costs accounted for more than 35%.
in the medical high-value consumables reform, only cost-effective products will be able to bid for the volume of procurement, even in the future DRG and medical supplies access catalog occupies a favorable position. Therefore, in 2019, companies in research and development investment is also spared no effort, the annual report shows that these companies research and development costs as a proportion of total revenue are showing a strong growth trend.
the data of the main annual reports of the eight listed companies of domestic orthopedic equipment
. Vigo shares (01066.HK) - domestic spine leading brand and orthopaedic product line solution, to lay the company's China market orthopaedic aircraft carrier status, to build dual-brand joint products, accelerate the sinking of the vast blue sea market, to help the company continue to run ahead
overall revenue: 2019, The total revenue of the Weigao Group 10.364 billion Yuan, breaking through the 10 billion mark for the first time, rose 17.7% YoY, slowed from 40% in 2018, with gross margin rising from 61.2% in 2018 to 62.8%, mainly due to product restructuring resulting from mergers and acquisitions, with net margin rising from 17% to 19%.
Business Revenue Analysis: The Vico Group's business is divided into six operating divisions - medical devices, orthopaedics, intervention (Ai-Yi), pharmaceutical packaging, blood management, and other (financial leasing and fidelity business). Among them, medical devices include clinical care, trauma management, medical testing, anesthesia and surgery-related products.
the company's operating income constitutes a . Orthopaedic Business Analysis:
- Business mainly includes: trauma, spinal implants, artificial joints, sports injury, soft tissue repair and reconstruction implants, bone filler materials, orthopaedic-related surgical tools.
- 2019, orthopaedic business accounted for 15% of the Group's total revenue, revenue of 1,555,556 million yuan, up 31.8% YoY, the Company consolidated its domestic brand market leadership in the spine field, while further increasing the marketing of joint products and channel sinking, including the construction of logistics platform and other measures, better to drive sales growth, joint sales growth in the reporting period of more than 50%.
- Vigo is considering the possible spin-off of Shandong Vigao Orthopaedic Materials Co., Ltd. (ViagoOOrthopaedic) and its subsidiaries and proposes an independent listing.
annual report Hao Yue point:
as one of the fast-growing business within the Weigao Group, since The Branch of Vigo Orthopaedic and Medtronic, embarked on a rapid development of orthopaedic localization road, with Medtronic cooperation to a large extent enhance the company's comprehensive strength in the spine product line, laid the domestic spine head chair. Thanks to the industry's high business climate, favorable policies, accelerated aging and import substitution, the company has achieved rapid growth in its operations in trauma, spine and joints. Acceleration for the layout of joint products is also a good sight in the orthopaedic field of the next imported alternative track. As a domestic brand, the company's product quality has been recognized by customers in the industry, in the channel sinking at the same time, but also eat into the import brand market share in the hospital.
analysis of orthopaedic supplies as the main business of other medical device companies in the capital market performance, we have reason to believe that if The Company of Orthopaedics from the Viago Group split listing, will be a good release of market confidence in the Weigao orthopaedic business, but also can help Vigo more focused on orthopaedic stoic farming and sustainable development.Minimalinvasive Medical (00853.HK) - Domesticized New Year's Wall Flowering Wall, Multi-Layout and Capital Assistance to Provide New Momentum for Performance Growth
Overall Revenue: In 2019, Minimally Invasive Medical Revenue was US$794 million (RMB5.580 billion), up 18.5% YoY. Cardiovascular Intervention Products business rose 35.5%, amajoranartery and peripheral vascular intervention products business rose 44.5%, neuro-intervention products business rose by 55.6%, the three segments of the business remained the core growth drivers of the company.
Business Revenue Analysis:
minimally invasive medical business structure is divided into eight sectors, cardiovascular intervention, orthopaedics, heart rhythm management, aorta and peripherals, nerve intervention, surgical instruments, heart valves, and others. There are several major changes to the 2019 minimally invasive medical business structure compared to 2018.
- Exiting the Diabetes and Endocrine Medical Devices business.
- Through the transfer of equity, the electrophysiological business shanghai micro-invasive electrophysiological into a non-controlling investment company.
- The minimally invasive aorta and peripheral intervention business Heart Pulse Medical is listed independently on The Core Board, with Minimally Invasive Medical retaining control with a 46.34 percent stake.
- Restructuring of the micro-invasive heart valve business, which became the holding company of the heart valve business, and Shanghai Micro-Invention Heartcom, a wholly owned subsidiary of Cayman.
the company's operating income constitutes a . - The business mainly includes joints, spinal trauma and other implants, tools and other products.
- In 2019, two domestic knee products have been approved for sale, marking the year of the domestic New Yuan after the acquisition of Wright by Minimalgenesis Orthopaedics.
- In February 2020, the domestic hip replacement system was certified to complete the basic layout of domestic joint products, and fully opened the era of localization.
- Orthopaedic revenue of $232 million, down 1.6% YoY, down 1.6% to 29%, making it the second-largest business with poor performance, while international market revenue (excluding China) accounted for $206 million, orthopedic revenue of 89%, down 4.7% after excluding currency impact, and China's revenue of $0.27 billion, excluding currency impact, rose 57.1%.
orthopaedic business area distribution . - U.S. market revenue fell 7.1%, mainly due to the continued impact of the loss of major distributors, with second-half revenue flat year-on-year, up 5.4% yoy, following new distributors, while the new generation of evolutionTM NitrXTM intra-shaft all-knee replacement systems for some metal ion allergy patients were approved for listing in the U.S. and Canada, injecting new vitality into the market.
- Revenue slower in Europe, the Middle East and Africa was down 3.3 per cent, mainly due to lower prices in local markets.
- Japan's revenue grew 0.9 percent, with the small increase mainly due to local customer development and sound marketing strategies.
- While china's market revenue accounted for only 11% of the Group's orthopaedic business, the growth was as high as 57.1%, due to the active promotion of the inner shaft knee concept and the customer recognition of SuperPath hip replacement surgery, and the expansion of domestic sales platforms for spine and trauma products, enhancing clinical promotion and accelerating clinical access. revenue in the
- rest of the market fell 6.6 per cent, mainly due to the negative impact of the Australian market.
's annual report:
minimally invasive orthopaedic overseas business underperformed in 2019 and revenue declined. Despite the overseas approval of new products, overseas revenue is expected to pick up in 2020 due to the impact of the new crown outbreak.
domestic business performed well in 2019, with revenue growth of more than 57%, comparable to that of leading domestic enterprises. The domestic income of minimally invasive orthopaedics is still small, and there is more room for growth in the future. New hip knee artificial joint products based on global research and development teams and systems will help minimally invasive orthopaedics quickly open up the domestic market and become an important driver of growth. With the continuous approval of domestic registration certificates, the company is expected to benefit from industry growth and domestic import substitution results from the performance of the improvement.
the level of capital operation, the orthopaedic business holding subsidiary of Minimalinc Medical recently successfully completed a 580 million yuan financing, the introduction of a number of well-known strategic investors including China Life Health Fund, Efonda Assets, Guangdong People's Investment Management, Qianyi Capital. The money will help minimally invasive orthopaedics further accelerate its localization process and begin to lay out emerging market segments such as sports medicine and surgical robots. In the future, the micro-invasive orthopaedic business segment is expected to follow the example of micro-invasive medical aortic intervention in the enterprise heart network medical, split independent listing.Dabo Medical (002901.SZ) - among the first echelons, each product line goes hand in hand, the new orthopaedic leader style first appeared
overall revenue: in 2019, Dabo Medical revenue of 1.257 billion yuan, up 62.77 percent Year-over-year, gross margin of 1.076 billion yuan, gross margin of 85.61 percent, up 5.21 percent yoy, attributable to listed companies shareholders net profit of 4.65 billion yuan.
business revenue analysis:
- Dabo Medical to orthopaedic implantable high-value consumables research and development, production and sales as the main business, its business segment includes.