"Our strategy is innovation and internationalization in parallel. While stabilizing the domestic base, we are expanding more overseas, maintaining profit space, and promoting the healthy development of the company." Regarding the acquisition of the European medical device sales company CME, the management team of Microport (688029.SH) told reporters from the Star Daily on September 19.

On the evening of the 18th, Microport announced that it plans to acquire 51% of the equity of Creo's wholly-owned subsidiary CME through its subsidiary "Microport Netherlands" with its own funds not exceeding 36.72 million euros (equivalent to approximately 0.289 billion yuan). After the transaction is completed, CME will become a subsidiary of Microport and will be included in the company's consolidated financial statements.

Data shows that CME is a channel company for the sales of medical device products located in Europe. The products it distributes include Creo's self-developed products, as well as related products from other medical device companies, including gastroenterology, urology, respiratory, and disposable endoscopes.

In the first half of 2024, CME achieved a revenue of 16.593 million euros and a net profit of 1.574 million euros. The net assets at the end of the reporting period were 15.92 million euros. Meanwhile, Microport had a cash and cash equivalents balance of 1.223 billion yuan.

Microport stated that CME's existing sales channels and products have high complementarity with Microport, and the two parties have a good foundation for cooperation, which is beneficial to the common development of both.

The aforementioned management team of Microport further told reporters from the Star Daily, "CME was originally an independent company and was later acquired by Creo, but when it was independent, it used to be our dealer. After that, after we went public, we wanted to focus on our own brand, so we established our own subsidiaries for direct sales in the UK and France, gradually interrupting the cooperation with CME. However, historically, we had a relatively pleasant cooperation."

As a research, development, manufacturing, and sales company of minimally invasive medical devices, Micro-Tech's main products include endoscopic diagnostic and therapeutic devices used in conjunction with endoscopes, microwave ablation equipment and consumables, and disposable endoscopes. In 2023, the revenue from consumables and disposable endoscopes accounted for nearly 70% of CME's total revenue.

It is understood that in the centralized volume-based procurement of medical consumables led by Hebei Province in the Jing-Jin-Ji '3+N' medical alliance in 2023, Micro-Tech was selected for multiple products, including two types of hemostatic clips, biliary stents, and tracheal stents. In May and June of this year, the Hebei Provincial Center for the Procurement of Medical Drugs and Devices and the Guangxi Medical Insurance Bureau successively issued notices on the implementation of this batch procurement, with a procurement cycle of 2 years each.

The Science and Technology Innovation Board Daily reporter found that in recent years, in order to hedge against the impact of domestic medical insurance cost control and centralized procurement, Micro-Tech is accelerating its "going global" strategy.

Micro-Tech's overseas sales revenue has increased from 0.742 billion yuan in 2021 to 1.042 billion yuan in 2023, and the proportion of overall revenue has increased from 38.11% to 43.22%. In the first half of 2024, Micro-Tech's overseas revenue was 0.624 billion yuan, further increasing the proportion of overall revenue to 46.78%.

At a recent investor exchange meeting, Micro-Tech revealed that the company adopts direct sales in the United States and Europe, while adopting a distribution model in Japan, Australia, and Latin America. In the first half of 2024, the revenue of 0.624 billion yuan from overseas, approximately 0.28 billion yuan came from the Americas region, with a year-on-year growth of about 38.6%, and approximately 0.22 billion yuan came from the EMEA region (Europe, Africa, Middle East), with a year-on-year growth of about 54%.

The acquired CME company's main business is concentrated in Western Europe, covering countries such as the United Kingdom, Spain, France, Germany, Belgium, and Luxembourg. In 2023, the revenue generated from the French region accounted for approximately 30% of CME's total revenue, and the combined revenue of the United Kingdom, Belgium, Spain, and Germany accounted for approximately 60% of the total.

Micro-Tech stated that after the acquisition of CME, it will introduce more product categories and new products not yet sold by CME to enhance the company's product sales capabilities and market share in the European region, and accelerate overseas expansion.

The above-mentioned personnel of Micro-Tech told the Science and Technology Innovation Board Daily reporter, "Although overseas development may also encounter some obstacles and constraints, it is not easy overseas. However, the overseas market is the focus of future development, and it is necessary to take action. Only by taking action can we find ways to deal with difficulties."

According to the forecast from Micro-Tech, the expected growth target for the European and American markets for the coming years is 20%+.