On March 15, 2023, the company issued an announcement stating that the holding subsidiary Zhejiang Kailite received the “Medical Device Registration Certificate” for the Continuous Glucose Monitoring System (CGM) issued by the State Drug Administration. The models and specifications include CT3, CT3A, CT3B, CT3C, and CT15. The products are used for continuous or regular monitoring of intertissue glucose levels in adult diabetic patients (≥18 years old).
The clinical advantages of CGM products are obvious, and the domestic market is still in the early stages of development. Unlike traditional finger blood glucose meters, continuous blood sugar monitoring can obtain more comprehensive trend data on glucose levels in the body's glucose levels through continuous monitoring of glucose levels in tissue fluid for 24 hours, which helps to more accurately adjust medication to improve blood sugar levels. Compared with traditional finger blood glucose meters, they are still an emerging market in China. There are few domestic manufacturers capable of achieving technological breakthroughs and forming sales scales, so there is huge room for future expansion.
The company's new products are free of calibration for 14 days, which is expected to lead the domestic CGM release trend. The new product can provide and store real-time glucose values for users to track trends in glucose concentration.
If glucose levels fall below or above the preset value, the product will alert you. The glucose sensor is for a single user only, does not require user calibration, and can be used for up to 14 days.
The new product is an important breakthrough for the company in the field of diabetes care solutions. In the future, it will give full play to the advantages of related products in terms of clinical efficacy, comfort, portability, safety and digital management, leading domestic CGM to achieve sales volume.
The subsidiary has outstanding R&D capabilities and continues to upgrade and iterate on blood sugar monitoring products. Zhejiang Kailite has an R&D team and leading talents working in the field of diabetes and sensor technology for decades. It has previously launched a “safe sugar resistant” continuous blood sugar monitoring product. The performance of the company's newly launched third-generation CGM products has improved significantly compared to previous CT2 products. More new varieties will continue to be developed in the future to provide a more stable growth impetus for the company's diabetes business.
We are optimistic about the company's potential in the three core tracks of respiration and oxygen production, blood sugar and POCT, and disinfection and sensing control. The company's net profit for 2022-2024 is estimated to be 1,490, 1,781, and 2,089 billion yuan respectively, up 1%, 20%, and 17% year-on-year. EPS is 1.49, 1.78, and 2.08 yuan respectively, and corresponding PE is 21, 18, and 15 times, maintaining the “buy” rating.
Risk of new product development falling short of expectations; risk of product promotion falling short of expectations; risk of acquisition integration falling short of expectations; risk of overseas market expansion falling short of expectations; risk of goodwill