Lepu Medical Technology once again delivered a semi-annual report with declining performance, with all three major business sectors experiencing a decrease in revenue year-on-year. Due to reasons such as product pipeline aging, Lepu Medical Technology determines that the revenue of the formulation business sector may decline to around 1.5 billion-1.6 billion yuan. The company conducted self-inspection and rectification in response to the issues and requests raised by the Beijing Securities Regulatory Bureau in the administrative regulatory measures document issued earlier.
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Financial Associated Press, August 23rd - Tonight, Lepu Medical Technology (300003.SZ) once again released a semi-annual report with declining performance, with all three major business sectors experiencing a decrease in revenue year-on-year. Due to issues like product pipeline aging, Lepu Medical Technology expects adjustments in the pharmaceutical business to continue for 1-2 quarters, and the revenue of the formulation business sector may decline to around 1.5 billion-1.6 billion yuan.
Tonight, Lepu Medical Technology announced that in the first half of this year, the company achieved revenue of 3.384 billion yuan, a year-on-year decrease of 21.33%, with a net profit attributable to shareholders of the listed company of 0.697 billion yuan, a year-on-year decrease of 27.48%.
Lepu Medical Technology's main business sectors include medical instruments, pharmaceuticals, medical services, and health management. Looking into detail, all three major sectors experienced a decrease in revenue year-on-year in the first half of the year.
The medical instruments sector is the largest revenue-generating sector for the company, achieving revenue of 1.754 billion yuan in the first half of the year, a 13% decrease year-on-year. The gross margin increased by 4.85 percentage points year-on-year to reach 72.06%. The performance of the core business sector, cardiovascular interventional business, saw a revenue increase of 1.151 billion yuan, a 16.92% year-on-year growth; while the surgical anesthesia business and the in vitro diagnostic business decreased by 3.87% and 57.15% year-on-year respectively.
Furthermore, the revenue of the pharmaceutical business sector was 1.135 billion yuan, a 29% decrease year-on-year. The gross margin decreased by 9.72 percentage points year-on-year. Specifically, the active pharmaceutical ingredient achieved revenue of 0.196 billion yuan, almost the same as last year, with a 0.52% year-on-year increase; while the formulation (generic drugs) achieved revenue of 0.939 billion yuan, a 33.15% decrease year-on-year.
The announcement revealed that Lepu Medical Technology's formulation business sector faces various issues, such as the ongoing problem of product pipeline aging due to internal research and development lag following the national centralized procurement of core products, and the gradual emergence of product pipeline disconnection between old and new products due to historical issues; in addition, intense market competition for some products results in significant differences in product prices compared to competitors. Based on this, the company anticipates that the adjustment of pharmaceutical business due to retail channel inventory clearance may need to continue for 1-2 quarters, and the revenue of the formulation sector may decrease to around 1.5 billion-1.6 billion yuan.
On the other hand, due to the decline in demand for household related medical instruments for life sign monitoring domestically and internationally after the COVID-19 pandemic, the company's medical services and health management sector achieved revenue of 0.496 billion yuan, a year-on-year decrease of 27.80%, with gross margin down by 0.13 percentage points year-on-year.
Looking at it regionally, in the first half of the year, Lepu Medical's domestic revenue decreased by 24.31% year-on-year, while overseas business achieved revenue of 0.489 billion yuan, an increase of 2.57% year-on-year.
To address the weakness in the pharmaceutical sector, Lepu Medical has shifted its focus on research and development, with plans to increase efforts. In 2022, a new pipeline for dermatological injection drugs was added, and in 2023, the company acquired a controlling stake in the cardiovascular innovative drug company Shanghai MinWei Biotech. Currently, the company's polylactic acid dermal filler injections and injectable cross-linked hyaluronic acid gel and other dermatological products have entered the registration application phase.
Tonight, Lepu Medical also released an announcement regarding the 'Rectification Report on the Administrative Supervision Measures Decided by the Beijing Securities Regulatory Bureau for the Company.' On August 2, the Beijing Securities Regulatory Bureau issued an administrative supervision measure decision to the company regarding failure to timely perform review procedures and disclosure obligations, as well as signs of impairment in certain intangible assets. Lepu Medical conducted self-inspection and rectification in response to the issues and requests raised in the decision, and stated that it will further revise financial management, sales management, and other systems based on the rectification matters and self-inspection initiatives, continuously enhancing the company's internal control management system.