① In recent years, dental products are the only products among the three main products whose revenue has declined year by year, and gross margin has also declined year by year. ② The acquisition of a brand imported from Germany is expected to increase the technology and market share of Aojing Medical.
“Science and Technology Innovation Board Daily”, April 26 (Reporter Zheng Bingxun) In order to further develop its business in the field of dental implants, Aojing Medical (688613.SH) announced on the evening of the 25th that it will use its own capital to acquire 100% of the shares of the German company HumanTech Dental GmbH, with a transaction consideration of 3.246,000 euros, or about RMB 25 million.
After the acquisition is completed, HumanTech Dental will become a wholly-owned subsidiary of Aojing Medical and will be included in the scope of the company's consolidated statements.
According to data, HumanTech Dental is a subsidiary of the German Hutzel Group. It is mainly responsible for developing, manufacturing, and selling dental implants and related dental medical products. Related products have successively obtained EU CE certification and China CFDA (now NMPA) registration certificate, and in recent years they have successively obtained registration certificates from Mexico, Egypt, Malaysia, etc.
The “Science and Technology Innovation Board Daily” reporter called Aojing Healthcare to inquire about the latest sales and net profit of HumanTech Dental, as well as the sales status of its dental products. The other party said, “The acquisition will only be completed in the near future. After the acquisition is completed, we may further disclose more about the company.”
Aojing Medical mainly carries out the business activities of high-end biomedical materials and related medical device products. The main products are mineralized collagen artificial bone repair products. Currently, it has a series of repair products including “bone gold,” “dental shell,” and “cranial surgery,” which are used for bone defect repair in orthopedics, oral or plastic surgery, and neurosurgery, respectively.
According to Ojing Medical, in the field of dentistry in China, both HumanTech Dental's dental implants and Ojing artificial bone repair products are used in oral implant surgery and can be used in combination with each other, and the product synergy is extremely high. Thus, the acquisition will help further consolidate Ojing Medical's leading position in the dental field.
The “Science and Technology Innovation Board Daily” reporter found that behind Aojing Medical's acquisition of HumanTech Dental may be to boost performance under pressure, especially dental products whose revenue is declining year by year.
While announcing the acquisition plan, Aojing Medical also disclosed its results for the first quarter of 2023 and 2024. It achieved revenue of 226 million yuan for the full year of 2023, a year-on-year decrease of 7.68%, and net profit to mother of 54.2318 million yuan, a year-on-year decrease of 43.04%. Aojing Medical said that the decline in revenue was mainly affected by the market environment and the decline in sales revenue.
Entering 2024, Aojing Medical's performance was also not optimistic. In the first quarter, it achieved revenue of 47,369 million yuan, a year-on-year decrease of 0.94%, and net profit to mother of 6.9381 million yuan, a year-on-year decrease of 62.52%.
Among revenue, the three major products of orthopedics, neurology, and stomatology are the main sources. In the period 2021-2023, these three products received a total revenue of 234 million yuan, 240 million yuan, and 218 million yuan, accounting for 99.19%, 97.95%, and 96.44% of the total revenue.
It is worth noting that in recent years, dental products are the only product among the three main products whose revenue has declined year after year. The revenue for 2021-2023 was 30.1953 million yuan, 23.955 million yuan, and 21.5936 million yuan, respectively, and gross margin also declined year by year, from 82.13% in 2021 to 75.39% in 2023.
The pressure on dental products can also be seen from their production and sales volume. In 2023, the production volume and sales volume of Aojing Medical's product “toothshell” for the dental field were 127,900 boxes and 112,500 boxes, respectively. Sales volume increased slightly by 1.10% year-on-year, while inventory increased sharply by 71.20%. The production and sales rate in 2023 was 87.99%, compared to 92.26% in the same period last year.
The “Science and Technology Innovation Board Daily” reporter asked about the reason for the decline in sales of dental products. The other party replied, “On the one hand, currently about 70% of the market share of China's dental business is occupied by foreign-funded companies, including domestic companies such as Ojing Medical, which account for very little. On the other hand, Aojing Medical's dental products did not win the bid in last year's collection, which also had an impact on sales.”
The other party said that the acquisition of a brand imported from Germany is expected to increase Ojing Medical's technology and market share.