Under the capital winter, overseas medical device companies are facing unprecedented challenges. At the same time, domestic companies are also facing severe problems such as a shortage of funds and even bankruptcy. The continuous adjustment of centralized procurement policies and anti-corruption actions in the medical field have also affected the domestic medical device market.

However, there are still some companies in the race showing resilient growth trends.

Recently, Kunbo Medical released its mid-term financial report for 2024, with significantly narrowed losses and closer breakeven points, showing some noticeable positive margin changes.

The financial report shows that in the first half of the year, through the localization transfer of production processes for the InterVapor thermal vapor treatment system and navigation products, the company effectively reduced production costs, with a gross margin increasing from 77% to 80% compared to the same period last year. At the same time, by focusing on the research and commercialization of core products, it optimized cost expenses through various measures, reducing net losses from last year's $14.731 million to $7.943 million, a significant narrowing of 46%.

Through the financial report, it can be seen that Kunbo Medical has several globally or uniquely innovative lung intervention treatment products, focusing on the treatment of chronic obstructive pulmonary disease and lung cancer.

In the respiratory intervention industry, there has long been a lack of treatment products. Whether it is lung navigation equipment or lung surgical robots, they can only achieve disease intervention diagnosis, without effective intervention treatment methods, resulting in slow progress in the market promotion of related devices. From the perspective of sales cycle, compared to expensive medical equipment, consumable products have a simpler sales process and shorter time for hospitalization sales. At the same time, due to the disposable nature of consumables, there is a huge demand and fast turnover in clinical applications. For companies, being able to ensure continuous sales of products can bring sustained cash inflow and profits, providing strong support for stable growth.

Kunbo Medical has a rich product portfolio in the field of diagnostic and therapeutic consumables, and its lung intervention treatment products for chronic obstructive pulmonary disease and lung cancer have made leading progress globally. At the same time, the company also has intervention diagnostic and therapeutic consumables for other lung diseases, expanding the clinical applications in various scenarios. With the precise market promotion strategy of innovative medical device products, it successfully accelerated the penetration of its consumable products in the domestic market in the first half of the year.

Among them, the InterVapor thermal vapor treatment system, as the world's first and only non-implantable medical device for the treatment of chronic obstructive pulmonary disease, has been commercially applied in more than 60 hospitals in China, and approximately 180 hospitals have used this technology. It has shown good clinical treatment effects and received wide recognition from doctors and patients. At the same time, the consumable products used in conjunction with the InterVapor device, such as the disposable thermal vapor treatment catheter, have obtained procurement prices through the centralized procurement system in 28 provinces and cities, laying the foundation for subsequent product entry into hospitals. Since its launch in China, this unique innovative technology has gone through more than two years of preliminary surgical promotion and has gained recognition from doctors. It is understood that the standardization of planned diagnosis and treatment is also being initiated, and it is expected that the cultivation of patient treatment awareness can promote the continued adoption of the product.

In addition, the company also mentioned two consumable products that can be used in multiple bronchoscopy surgeries in its financial report: Wuzhuang disposable endoscopic atomization microcatheter and BroncTru disposable bronchoscopy puncture expansion catheter. It is understood that these products have been clinically applied in many medical centers across the country, with a wide range of applications in respiratory and thoracic surgery, such as airway anesthesia, antibacterial and anti-inflammatory treatment, sputum elimination, staining in thoracic surgery, pulmonary biopsy surgery, and laser ablation. With the increasing number of clinical applications and the growing number of surgeons and hospitals using these consumable products, it can drive the continuous increase in the sales volume of consumable products and add new competitiveness to the enterprise's revenue growth.

In the current environment of intense market competition and rapid product iteration, Kunbo Medical is not only focused on the commercialization of existing products. It continues to increase investment in the research and development of lung cancer and chronic obstructive pulmonary disease (COPD) related products and promote the registration process, strengthen the domestic independent R&D product pipeline, and build a comprehensive solution for the interventional treatment of pulmonary diseases. Its lung cancer interventional treatment product, Zhiheng RF-II radiofrequency ablation system, has submitted an NMPA registration application and is at the forefront of clinical progress in the field of lung cancer interventional treatment. The preclinical trial of TLD, a product for treating acute exacerbations of COPD, is also progressing smoothly. These two heavyweight treatment products will continue to enhance its leading position in the respiratory interventional market.

In addition, Kunbo Medical also deepens the integration of medicine and engineering to develop interventional treatment products for pulmonary diseases that meet clinical needs, and innovatively develops new bronchoscopic intervention diagnosis and treatment techniques, such as the self-developed TLD pulmonary targeted radiofrequency ablation system, the first of its kind in China, to bring safer and more effective solutions to patients.

Overall, in the context of the industry facing challenges, Kunbo Medical not only steadily promotes the R&D and clinical trials of its core products, but also actively layouts its transformation strategy. It has demonstrated good operational resilience in its performance in the first half of the year. It is believed that with the continuous maturity of the company's market strategy and further improvement in profitability, relying on a more robust consumables business, its market performance is expected to receive positive catalytic effects, and the subsequent valuation recovery is worth looking forward to.