Announces 2014 Annual Results(2015-03-24)

 Announces 2014 Annual Results

Profit Attributable to Owners of The Company

Surged by 126.7% to RMB176.6 Million

 

 

[23 March 2015, Hong Kong] PW Medtech Group Limited (“PW Medtech” or the “Company” and, together with its subsidiaries, the “Group”; stock code: 1358), a leading medical device company in China, today announced its annual results for the year ended 31 December 2014 (the “Year”).

 

PW Medtech is one of the leading domestic medical device companies in the development, manufacturing and sale of (i) regenerative medical biomaterial products (the ‘‘Regenerative Medical Biomaterial Business’’), (ii) advanced infusion sets products (the ‘‘Infusion Sets Business’’) and (iii)orthopedic implants products (the ‘‘Orthopedic Implants Business’’) in China. As a result of sustained growth of all the three business segments in 2014, and with the completion of the acquisition of the Regenerative Medical Biomaterial Business, the Group has achieved significant growth over the past year.

 

During the Year, the Group’s revenue and profit attributable to the owners of the Company were RMB608.1 million and RMB176.6 million, representing an increase of 33.0% and 126.7% over 2013, respectively. After excluding non-operational and one-off items, comprising listing and merger and acquisition costs and share-based compensation expenses and their respective tax impact, the unaudited adjusted net profit increased by 45.5% to RMB204.7 million in 2014 (2013: RMB140.7 million). In 2014, the Group recorded a gross profit of RMB442.9 million, representing an increase of 42.7% over 2013. The acquired Regenerative Medical Biomaterial Business had a higher gross profit margin than the other business segments, and the overall gross profit margin of the Group increased to 72.8% in 2014 (2013: 67.9%).

 

Expansion into the Regenerative Medical Biomaterial Segment and

Expansion of Product Portfolio

 

In August 2014, the Company completed the acquisition of the 100% equity interest in Beijing Tianxinfu Medical Appliance Co., Ltd. (北京天新福醫療器材有限公司, “Beijing Tianxinfu”) at a total consideration of approximately RMB802.6 million. After completion of the acquisition and the successful integration of Beijing Tianxinfu’s business in 2014, the Group expanded into the biomaterial segment and created new profit growth drivers by expanding into more medical applications of the biomaterial products in new areas with R&D investments and technology advancement. With our continuing investment and allocation of experiences and resources in R&D, distribution and administrative management, we expect this segment will continue to create new growth drivers for the Group.

 

As for Regenerative Medical Biomaterial Business, Beijing Tianxinfu has been working with large scale Class III hospitals to upgrade its current products to develop a series of regenerative medical biomaterial products with new applications, functions and features in order to diversify product portfolio. The product registration of a brand new product, namely antiadhesion membrane for tendon and ligament, has been obtained, and the product is expected to be launched in the first half of 2015. Meanwhile, the Group continues to develop the other two main pipeline products, namely the oral cavity membrane and second generation of artificial dura mater, of which the clinical trials will be started in 2015.

 

As for Infusion Sets Business, to deliver products for safer and more effective infusion treatments, the Group has been developing a series of advanced infusion set products with new functions, new features or new combinations of these advanced features. For precision filter infusion sets, the Group successfully obtained the product registrations of, and added into its product portfolio, the infusion sets with refined precision filter with pore size of 0.2 micon and light-resistant infusion pump tubing. For the non-PVC based infusion sets, the Group has obtained three new product registrations and launched new types of non-PVC infusion sets, expanding its non-PVC based infusion product portfolio with additional function of light-resistance, additional varieties of pore sizes of precision filters, and various combinations of these attributes. The Group will expand the non-PVC-infusion sets portfolio by introducing new features and broadened applications.

 

As for the Orthopedic Implants Business, the Group achieved remarkable progress in its continuous research on optimizing the three main product categories: trauma products, spine products and joint products. For trauma products, the Group is further improving the bridge-link combined fixation system which was commercially launched in July 2012. For spine implants, the Group has successfully launched modified u-shape posterior spinal fixation system and instruments and modified thoracolumbar fusion cage and instruments in 2014. The Group will continue to work on both the initial introduction of brand new products (for example, the trabecular metal product currently under development) and the improvement of existing products in trauma and spine segments. The Group will continue to devise new ideas and develop advanced materials to satisfy varied patient demands for the hip and knee implants.

 

Emphasis on Innovation and Research and Development

As a leader in development of innovative medical products in China, the Group currently possesses an experienced R&D team comprising of approximately 100 members. As at December 31, 2014, the Group had a total of 44 Class-III medical device registration licenses and obtained 77 patents. The Group will continue to invest in product innovation and R&D in future, and cooperate closely with surgeons, hospitals, university research centers and other research institutions to integrate results from R&D and develop products which meet market demands.

 

Expansion of Distribution Network

The Group operates a widespread and fast-growing nationwide distribution network, which covers 31 provinces, municipalities and autonomous regions in the PRC. After the acquisition of Beijing Tianxinfu, the Group obtained one of the largest distribution networks in China in neurosurgical area, covering approximately 1,000 hospitals with over 150 distributors. In relation to the Infusion Sets Business and Regenerative Medical Biomaterial Business, the Group will focus initially on the Class III hospitals in larger-than-average cities in the more developed regions of China, and then penetrate into smaller hospitals and cities. For the Orthopedic Implants Business, the Group will continue to focus on expanding its business at Class II hospitals in the second and third tier cities, and concentrate on developing sales and marketing capabilities for the joint implants business.

 

Increase of Production Capacity

Currently, the Group has one plant for the regenerative medical biomaterials segment in Changping District (Beijing), three plants for the orthopedic implants segment in Tianjin, Anyang (Henan Province) and Shenzhen (Guangdong Province), and two plants for the infusion sets segment in Fengtai District (Beijing) and Xuzhou District (Jiangsu Province). The Group is also planning to build two additional plants in Linyi (Shandong Province) and Pinggu District (Beijing) to expand its production capacity for infusion sets.

 

In view of the growing potential of the orthopedic implants market in China, and the increasingly popular advanced infusion sets are now replacing conventional infusion sets. In the next 3 to 5 years, the Group will continue to invest in its existing plants to expand its production capacity for advanced infusion sets. Meanwhile, the Group plans to increase the production capacity of trauma and spine implants of the facility in Tianjin.

 

Mr. Jiang Liwei, Chief Executive Officer of PW Medtech concluded, “Looking forward, China’s medical device market, especially the medical consumables market, will continue to enjoy sustainable and healthy growth. The Group will continue to promote the established development strategies to achieve the steady development of the business, including expansion of product portfolio, emphasis on innovation and R&D, expansion of distribution network and increase of production capacity, In order to fully seize the great market opportunities in the regenerative medical biomaterial, advanced infusion set and orthopedic implant markets. In the coming years, the Group will continue to identify fast-growing, high-margin and high-potential opportunities in the medical device industry by utilizing its capabilities on strategic acquisitions, which will in turn provide support to the rapid business growth and consolidate market leadership in the medical device industry.”

more Corporate News