Financial Services Association, March 28 (Reporter Gao Yanyun) This Hong Kong stock listed company revealed a “fake” financial report. Under the appearance of a slight decline in performance, what is hidden is a “boom” in overseas business.

On March 28, Xianjian Technology disclosed its annual report. In 2023, it achieved revenue of 1,267 billion yuan, an increase of 15.5% over the previous year; net profit without return to mother was 423 million yuan, a slight decrease of 2.3% over the previous year. The company's international business grew strongly. Sales in overseas markets increased 36% year on year last year. In particular, the European market performed well, with a year-on-year growth rate of 52.9%.

The company's core business grew steadily, with structural heart disease business growing 25.6%, peripheral vascular disease business growing 9.7%, and pacing electrophysiology business growing 10.3%.

Non-recurrent projects interfere with perceptions of Xianjian Technology's ability to operate. The company claims that the valuation of Yuanxin Technology's redeemable shares rose sharply by 173%, and the fair value of its redeemable shares increased significantly. The loss due to changes in the fair value of financial liabilities recorded at fair value in 2023 was about 210 million yuan; other income and losses generated by financial assets that include profit and loss at fair value were 34 million yuan in 2023; the total amount of share-based payment expenses in 2023 was 113 million yuan.

European business surged by more than 50%

Xianjian Technology's international business is growing strongly, and the mainland's business operation performance is relatively steady.

According to Xianjian Technology's financial report, the company successfully expanded its sales channels to nearly 120 countries and regions around the world. The penetration rate of products in overseas markets continued to deepen, and overseas sales increased significantly by 36% year on year. In particular, the European market grew strongly by about 52.9% on a high base.

With the effective advancement of the internationalization strategy, the international business development of Xianjian Technology continues to accelerate. In 2023, the share of sales in overseas markets increased to 21.7% of total revenue. Among them, Asia (excluding the mainland) and Europe are the company's two largest overseas markets, and the share of sales in total revenue jumped to about 9% and 8.8%, respectively.

As the “basic market” of Xianjian Technology, the mainland market achieved a relatively steady business growth rate. Sales of the company's mainland business increased 10.8% year-on-year last year, accounting for 78.3% of the company's total revenue.

The three core businesses have been steadily improving

Judging from the growth rate of Xianjian Technology's core business, they have all achieved steady growth, continuing to demonstrate development resilience.

Xianjian Technology's structural heart disease business had sales revenue of 496 million yuan last year, an increase of 25.6% over the previous year. Among them, revenue from sales of left atrial occlusive devices increased 32% year over year, and revenue from sales of congenital heart disease occlers increased 23.1% year over year.

The peripheral vascular disease business had revenue of 707 million yuan last year, an increase of about 9.7% over the previous year. Among them, revenue from sales of laminated stents increased by 11.2% compared to the same period last year, and revenue from sales of venous venous filters decreased by about 1% compared to the same period last year.

The sales revenue of the pacing electrophysiology business was 64 million yuan, an increase of about 10.3% over the previous year. According to Xianjian Technology, the company's domestic-branded MRI-compatible pacemaker project is progressing in an orderly manner and will further enrich the product portfolio of its pacemaker electrophysiology business.

Xianjian Technology's profitability remained stable. The company achieved gross profit of 996 million yuan last year, an increase of 13.9% over the previous year. The gross margin was 78.6%, and the net profit margin after deducting non-return to mother was 33.4%.

It is worth noting that Xianjian Technology has abundant cash flow. As of the end of 2023, the company held 979 million yuan in cash and cash equivalents. According to the company, the above increase in cash flow is mainly due to increased cash flow from operating activities, and abundant cash flow has laid a solid foundation for the company's long-term development.

R&D investment increased by more than 40%

In 2023, Xianjian Technology invested 298 million yuan in R&D, an increase of 42.9% over the previous year, to continuously strengthen technological innovation capabilities, cultivate innovative talents, and continue to accelerate the development and commercialization of new products.

In addition, the commercialization of Xianjian Technology products is progressing in an orderly manner. Many products have been approved for domestic and overseas marketing or related certifications, and more products are in the clinical stage of domestic and foreign registration.

Xianjian Technology's global intellectual property layout has improved markedly. By the end of last year, the company had submitted 2,147 valid patent applications, of which 942 valid patents had been approved.

Subsidiary B's valuation increased 173% after round investment

In September 2023, Yuanxin Technology, a subsidiary of Xianjian Technology, successfully completed Series B strategic financing of more than 200 million yuan. Series B financing brought in many strategic investors such as Gongqingcheng Huayi and Guangfa Qianhe. Round A investors such as IDG and Shanghai Baoquan continued to invest, leading to a sharp increase of 173% in post-investment valuations compared to the previous round.

Yuanxin Technology focuses on the research, development, manufacture and sales of medical bioabsorbable metal material products. The iron-based bioabsorbable materials independently developed by the company and pioneered in the world have a wide range of application space and expansion potential in the medical field. The first three products were aimed at treating coronary artery stenosis, submandibular artery stenosis, and pulmonary artery stenosis, respectively, or the market capacity is extremely large or clinical needs need to be met urgently. With the help of capital, clinical and marketing approval of these three innovative products progressed in an orderly manner during the reporting period.

According to Xianjian Technology, capital assistance will further accelerate the clinical and marketing process of revolutionary innovative products on the company's iron-based bioabsorbable materials platform, thereby bringing unprecedented, safe and effective treatment methods to patients around the world as soon as possible, and will effectively promote Yuanxin Technology to independently carry out subsequent capitalized operations, thereby enhancing the overall value of Xianjian Technology.

Xie Yuehui, Chairman of the Board of Directors and CEO of Xianjian Technology, said that despite facing multiple challenges in 2023, the company is still making steady progress in R&D and innovation, global channel expansion, and product sales. Driven by the two-way development strategy of “innovation” and “internationalization”, Xianjian Technology has penetrated the global intellectual property dense with original research and innovative products, covering nearly 120 countries and regions around the world, keeping the degree of internationalization of the company's business leading the domestic industry. We believe that the long-term benefits of innovation will enable the company to face future challenges, provide sustainable momentum for breakthrough development, and provide a solid guarantee for our continuous expansion into the international market.

“In the future, we will continue to use innovation to stimulate our strong business vitality and development potential in the global market. Promote the rapid development of existing business in the global market with a prudent and pragmatic attitude, strict and efficient management, and a solid and stable business core. At the same time, we will also actively seek and seize new development opportunities, integrate and strengthen superior internal and external resources, and enhance the Group's overall value in multiple dimensions, so as to achieve our development goals in the global healthcare field as soon as possible.” This is what Xie Yuehui said.