From November 30th to December 5th, Gaoshi Medical Technology Co., Ltd. (Gaush Meditech Ltd, code 02407.HK), China's leading ophthalmic medical device supplier, launched its initial public offering and went to Hong Kong for IPO to enter the final sprint stage.
As a leading enterprise in China's ophthalmology medical device industry, Gaoshi Medical has established a strong competitive advantage by virtue of its rich product portfolio, outstanding technical service capabilities and growing technical research and development strength. In the face of the hundreds of billions of blue ocean of China's ophthalmic medical device market, after listing in the future, Gaoshi Medical will rely on the capital market platform, will further increase R & D investment, enhance the comprehensive competitive strength, and grasp the development opportunities of the ophthalmic medical device market.
The comprehensive competitive advantage is very outstanding
According to public data, as a pioneer in China's ophthalmic medical device industry, Gaoshi Medical's medical device products cover all seven ophthalmic subspecialties for diagnosis, treatment or surgery. to provide one-stop ophthalmic medical device solutions for more than 4000 end customers in China and services for all provincial administrative regions in China, including ophthalmic diagnostic equipment, surgical and treatment equipment and consumables, as well as after-sales technical services.
In the domestic ophthalmology medical device market, the leading position of Gaoshi medical treatment is very prominent. According to the data disclosed by Frost Sullivan, Gaoshi Medical is the largest domestic enterprise in China's ophthalmic medical device market in terms of market share, with a market share of 6.7%. In terms of revenue in 2021, Gaoshi Medical is the fourth largest enterprise in China's ophthalmic medical device market, including foreign-funded enterprises, with revenue of 1.298 billion yuan in 2021.
Whether it is the product mix or technical services, Gaoshi Healthcare has a very obvious competitive advantage:
On the one hand, Gaoshi Medical has a rich and stable product portfolio, which can cover a wide range of ophthalmic diagnosis and treatment, as well as a multi-channel sales network throughout the country and a mature ophthalmology KOL network. At the same time, High Vision Medical has worked with 19 global brand partners, 16 of which have entered into exclusive distribution arrangements with High Vision Medical for their products, including Heidelberg, Schwind and Optos.
It is worth mentioning that in recent years, the proportion of Gaoshi's own medical products has gradually increased through independent research and development and epitaxial mergers and acquisitions. In particular, after the acquisitions of Roland and Tailiang were completed in 2020 and 2021 respectively, the share of revenue from Gaoshi's own medical products increased from 1.1% in 2019 to 3.0% in 2020 and 28.0% in 2021, and further increased to 29.5% in the first half of 2022.
On the other hand, Gaoshi Medical has a very outstanding technical service ability. In terms of income from technical services and the number of internal maintenance engineers, Gaoshi Medical is the largest local supplier of technical services for ophthalmic devices in the domestic market and the second largest service provider in the market in 2021. In 2019, 2020 and 2021, the income generated by Gaoshi Medical's provision of technical services reached 108 million yuan, 139 million yuan and 162 million yuan respectively. If it is divided by business attributes rather than just "product" attributes, the proportion of revenue from Gaoshi's own medical business (technical services + revenue from own-brand products) has also exceeded 40%.
In addition, the growing strength of technological research and development adds to Gaoshi Medical's advantages in product mix and technical services.
In particular, through the acquisition, Gaoxi Medical has inherited more than 20 years of experience in the research and development of IOL, the world's leading IOL R & D resources, platforms and core intellectual property rights, as well as Roland's electrophysiological equipment R & D capabilities. And integrate Roland's R & D team with the company's R & D team in China. At present, the company has registered 10 invention patents and 16 practical patents in mainland China, and 83 patents in Hong Kong, China, the European Union and other regions. In line with this, Gaoshi Medical has continued to increase its R & D investment in recent years, increasing its R & D expenditure from 2.7 million yuan to 23.5 million yuan from 2019 to 2021, and from 9.38 million to 22.42 million in the first half of 2021 compared with the same period in 2022, an increase of nearly 140% over the same period last year.
With a rich product portfolio, superb technical service capabilities, and growing technical research and development strength, Gao Shang Healthcare has achieved steady growth in recent years. According to the prospectus, in 2019, 2020 and 2021, the income of Gaoshi Medical reached 1.107 billion yuan, 962 million yuan and 1.298 billion yuan respectively, the gross profit reached 463 million yuan, 436 million yuan and 610 million yuan respectively, and the adjusted net profit was 135 million yuan, 163 million yuan and 209 million yuan respectively.
In particular, Gao Shi Healthcare's profitability continued to improve, with gross profit margin rising from 41.9% in 2019 to 45.3% in 2020 and further to 46.9% in 2021. Behind this, the company's product structure continues to optimize, with revenue from ophthalmic consumables with higher gross margins rising from 13.4% in 2019 to 14.6% in 2020, 31.5% in 2021 and 35.7% in the first half of 2022.
Broad prospects for the development of the industry
In the face of the vast blue ocean of ophthalmic medical equipment, the development prospect of high vision medical treatment is widely valued by the market.
Vertically, the market prospect of ophthalmic medical equipment is very broad. Data show that from 2017 to 2021, the global market for ophthalmic medical devices grew from US $21.5 billion to US $26.8 billion. With the expansion of patient population and the development of advanced technology, the global ophthalmic medical device market is expected to reach US $40.7 billion and US $56.4 billion respectively by 2025 and 2030.
Among them, China's ophthalmic medical device market increased from 9.2 billion yuan in 2017 to 16.3 billion yuan in 2021, with a compound annual growth rate of 15.5%, which is higher than the growth rate of the global ophthalmic medical device market. It is expected that China's ophthalmic medical device market will have a higher growth in the next five years, and the market size is expected to grow to 30.4 billion yuan in 2025 and 51.5 billion yuan in 2030.
Horizontally, the development potential of China's ophthalmic medical device market is still huge. Due to the scarcity of medical resources and limited patient awareness, the penetration of ophthalmic health services in China has been suppressed for a long time. According to Frost Sullivan, in 2021, the number of ophthalmic patients with major eye diseases in China is about 1.7 to 11 times that of the United States, while the size of the American ophthalmic medical device market is now much larger than that of the Chinese market. this means that there is a great unmet demand for patients in China's ophthalmology industry, and there is a huge room for growth in the ophthalmology device market.
As a leading enterprise in the industry, with strong comprehensive competitive strength, Gaoshi Medical will fully enjoy the dividend of the development of ophthalmic medical device market. In particular, after listing in the future, relying on the capital market platform, Gaoshi Medical will further increase R & D investment, enhance technical strength, improve product mix, consolidate technical service capacity, and grasp the development opportunities of ophthalmology medical device market.
The future strategy is clear and clear
The determination of Healthcare to increase investment in R & D is also evident in the purpose of raising funds.
According to the prospectus, the funds raised by Gaoxi Medical will be used to improve the company's R & D capability and accelerate the commercialization of patents within two years; upgrade the R & D capability of intraocular lens products and hydrophobic and hydrophilic materials used to produce intraocular lenses; R & D and production of comprehensive ophthalmic diagnostic equipment (including optometry equipment and ophthalmic electrophysiological equipment); R & D and production of high-value ophthalmic consumables (such as OK lenses) and ophthalmic surgery consumables, etc.
In addition, in order to promote long-term growth, Gaoshi Medical said that the following key strategies will be implemented in the future, including: improving the composition of the product portfolio, expanding its own product range, and optimizing cooperation with brand partners to further consolidate its market position; optimize value-added solution capabilities to improve customer stickiness and satisfaction, and continue to focus on the needs of ophthalmic patients and focus on China's ophthalmic medical device market. Through endogenous growth and strategic cooperation, we can consolidate our market position in China and expand our global footprint, achieve balanced development of business at home and abroad, attract and train international talents, and reduce the turnover rate at the same time. Gao Shi Healthcare, which continues to focus on the golden track of ophthalmology, will also continue to improve its management level and enhance its comprehensive competitiveness, consolidate its leading position and lead the development of the industry.