With a large base of diabetic patients, CGM and insulin pump bring about innovation in blood glucose management.
The number of patients with diabetes is large, the disease burden is heavy, and effective blood glucose management is of great significance for the prevention of diabetic complications. Diabetes management medical devices mainly include monitoring and treatment instruments, traditional products are blood glucose meter, insulin syringe, insulin pen and so on.
The emergence of continuous blood glucose monitoring system (CGM) and insulin pump is expected to bring about innovation in blood glucose management, providing continuous and dynamic blood glucose monitoring and smooth and accurate insulin infusion. At present, the global CGM market share is mainly occupied by Dekang, Abbott Laboratories and Medtronic PLC, while the insulin pump market is dominated by Insulet, Medtronic PLC and Roche.
The company focuses on diabetic devices and is expected to become an industry leader in insulin pumps and CGM.
Weitai Medical is the only company in the world that has both approved patch insulin pumps and a calibration-free continuous glucose monitoring system. The company's insulin pump product, Equil, was approved for market in Europe and China in 2017. AiDEX G7, a CGM product, was certified by CE in 2020 and listed in China in 2021. As the company's products enter the harvest period, it is expected to occupy the first-mover advantage in the field of diabetes management equipment.
The performance of core products is better than that of first-line imported brands, and some of them may be better. Equil insulin pump adopts semi-throwing, catheterless sticking design, which is lighter, more private, more accurate and safer than traditional pipeline insulin pump. AiDEX G7 continuous blood glucose monitoring products adopt calibration-free design, and their performance is comparable to or better than that of similar imported products in terms of accuracy, sensor calibration, service time and transmitter life.
Insulin pumps contribute nearly half of the income, and the volume of new products on the market is expected to promote rapid income growth. The company's operating income in 2020 was 75.28 million yuan, an increase of 45.24% over the same period last year, with a net loss of 121 million yuan, mainly due to large investment in research and development and sales. At present, the company's income mainly comes from insulin pumps and traditional blood glucose monitoring systems. Insulin pumps contributed 34.74 million yuan in revenue in 2020, an increase of 41 percent over the same period last year, accounting for 46.2 percent of the revenue. With CGM products listed in the European Union and expected to be approved in China in the near future, the company's revenue is expected to grow further rapidly.
Benefiting from the continuous growth of diabetes management equipment industry, the company is expected to develop rapidly. After years of research and development accumulation, the company's core products have entered the harvest period, the new generation of insulin pumps and CGM, artificial pancreas and other follow-up research and development pipelines have strategic depth. Considering the technical iteration of the industry, increased promotion efforts by manufacturers, lower product costs and other factors are expected to continue to improve the market recognition and permeability of insulin pumps and CGM, the company is expected to rely on the first-mover advantage in the field of diabetic devices to achieve rapid growth in revenue and profits. On July 28, the company's application for issuance and listing of H shares has been approved by the CSRC, and the approved company has issued no more than 138 million overseas listed foreign capital shares. So far, the company has not disclosed the specific issuance plan. It is suggested that we should actively pay attention to the progress of the company's listing and cover the non-rating for the first time.
Risk tips: product R & D registration risk; marketing risk; new technology substitution risk; continuous loss risk.