Since 1984, when German-American economist Theodore Levitt reaffirmed the concept of 'globalization' through his article 'Globalization of Markets,' 'globalization' has become a hot international topic. Under the new global macro paradigm, Chinese enterprises are nurturing a new generation of global brands. Domestic invisible orthodontic industry leader Angelalign (06699) is gradually growing into a strong force in the outbound chain.

On August 22, Angelalign released its performance report for the first half of 2024, presenting an impressive report card to the market. During the period, the company's revenue was 0.862 billion yuan, a year-on-year increase of 39.8%; the gross profit was approximately 0.538 billion yuan, a year-on-year increase of 47.1%. Of note, the total number of invisible correction cases in the first half of the year reached 1.529 million cases, a strong year-on-year increase of 60.3%, with the number of international market cases reaching 0.576 million, accounting for 37.7% of the total cases. As the results of international layout accelerate, Angelalign's global brand awareness is also awakening.

High-quality leading companies naturally attract capital. After the performance report, the company's stock price soared, rising more than 20% during the day and closing up 17.4% at HK$61.4, with a turnover of 0.131 billion Hong Kong dollars, showing investors' recognition of Angelalign's high-quality performance.

Wisdom Financial APP believes that Angelalign's fundamentals are accumulating upward momentum, with its product technology being recognized among overseas doctors and the effectiveness of overseas market marketing strategies gradually validated. The expectations for the overseas market becoming the company's second growth curve are quickly materializing, and performance is expected to achieve high elastic growth as the overseas market volume expands.

From an investment perspective, investing in overseas enterprises is essentially an extension of corporate competitiveness and a reevaluation of future cash flow value. With the prominent attributes of being a strong force in going global, Angelalign is expected to undergo a pricing logic reshaping, helping to boost its valuation.

Digging deep into Angelalign's strong force approach in global layout.

Since Angelalign vigorously expanded into global markets, it has achieved significant results in strategic markets such as Europe, North America, Asia Pacific, and Brazil, thanks to its innovative product technology, professional medical services, and efficient production and delivery. In the first half of 2024, the number of invisible correction cases in international markets reached 0.576 million, a significant year-on-year increase of 512.8%; international market revenue reached 0.23 billion yuan, showing a significant year-on-year growth. This indicates that Angelalign's global business layout is gradually entering a harvest period.

In the first half of this year, Time Angel's overseas market growth far exceeded the industry growth rate, with strong alpha properties. By tapping into its global layout, we can better grasp the long-term certainty of its international growth.

In the book "Global Brand," Hollis established an evaluation system for global brands based on user feedback. Perhaps it can become a framework for evaluating its global layout. Hollis said, "Before forming user feedback, global brands are also the result of internal brand capabilities, including product research and development, user experience enhancement, brand communication, supply chain, and localization, and a complete set of internal capabilities for global brands."

Specifically for Time Angel, the company has established solid barriers in product testing, localization, brand communication, etc., strengthening its advantages in international layout.

Firstly, Time Angel's controlling shareholder, Songbai Investment, has assisted in the expansion of its international territory and supported it in strategic guidance, resource integration, brand promotion, and other aspects. Songbai Investment's forward-looking planning and global industrial resources provide important guidance for Time Angel's globalization, especially in formulating localization strategies and recruiting global talent. At the same time, with the help of Songbai Investment's global industrial layout, Time Angel has opened up more opportunities for industrial chain cooperation in terms of mergers and acquisitions, joint product research, and market development, and has established a trustworthy brand image through a series of global market activities.

Secondly, in product testing, Time Angel has strong global competitiveness in terms of the richness of its product portfolio, the performance of its films, the coverage of its indications, and its intelligent manufacturing capabilities. The company's strong product capabilities have been recognized by international professional orthodontic opinion leaders, providing strong endorsement for the company's brand. In addition, the company has entered the Brazilian market through the acquisition of Aditek and has successfully promoted collaborative empowerment in medical design and intelligent manufacturing, driving the growth of its own brand 'Self' and laying a solid foundation for the formal listing of Time Angel's product series. In the future, the company plans to meet the diversified needs of the Brazilian market in the form of the dual brand 'Self' + 'Time Angel'.

It is worth noting that talent is key. Time Angel has further established and expanded local business teams with rich orthodontic market experience in the United States, Europe, and Australia, continuously deepening its connections with local orthodontists. For example, in the European market, Time Angel has organized and participated in multiple high-impact academic activities. In March 2024, the company successfully held the first 'European Time Angel Academic Forum' in Spain, not only promoting Time Angel's brand influence in the European market, but also strengthening its cooperation with local medical experts.

In various regional markets around the world, benefiting from its localized advantages, high-quality medical design solutions, clinical medical support, and stable and efficient delivery capabilities, Time Angel's products and services have covered thousands of dentists in more than 50 countries and regions worldwide, gradually establishing its global influence.

In conclusion, with the coordinated efforts in product testing, localization construction, and brand communication, Time Angel's international growth momentum is gradually being released, thereby helping in the construction of its global brand and laying the groundwork for long-term growth.

Solidify digital capabilities and activate high-quality growth in the domestic market.

As a leading domestic invisible orthodontics company, Era Angel continues to strengthen its digital capabilities and activate high-quality growth in the domestic market.

In the first half of 2024, the company achieved 0.0953 million cases of invisible correction in the domestic market, a year-on-year increase of 10.8%; domestic revenue reached 0.633 billion yuan, a year-on-year increase of 10.1%.

According to the intelligence of the Financial APP, Era Angel has obvious first-mover advantages in the domestic market and continues to increase R&D expenses, committed to product innovation and technological progress, in order to consolidate its differentiated competitive advantage.

In the first half of 2024, Era Angel's R&D investment reached 74.87 million yuan, accounting for 8.7% of its total revenue. As of June 30, 2024, Era Angel has registered 193 patents and 16 software copyright. Era Angel not only continues to promote innovation in dental medicine solutions, but also constantly scales up production of digitized technology-enabled orthodontic processes and personalized products, driving digital innovation with users at the center and establishing a solid foundation for long-term development.

It is worth noting that due to the high prevalence of malocclusion in China and the high proportion of complex cases, the quality of patient data is often higher, which is more conducive to manufacturers updating and iterating their products. As a domestic leader in invisible orthodontics, the company has accumulated a large amount of high-quality patient data in its development process and continuously feedbacks and iterates its products, ultimately forming strong product capabilities.

Intelligence of the Financial APP believes that Era Angel is deeply cultivating the Chinese market and building a positive cycle based on product advantages, high-quality service, and a large number of accumulated cases. With the continuous empowerment of digital capabilities and the enhancement of user experience, the company is expected to unleash scale effects, seize the growth potential of grassroots markets, and drive sustained and steady growth in its domestic business.

Summary: As a leading company in the overseas orthodontics industry, Era Angel's pricing logic is expected to gradually improve.

From an investment perspective, the theme of going global has clearly achieved excess returns this year. According to a research report by West Securities, the median change in value of A-share listed companies from the beginning of the year to May 17 was -13.8%, while the median change in value of domestic-oriented/going global contracting companies was -13.7% and -16.9% respectively. On the other hand, the median change in value of low-speed/ growth/ benchmark/mature going global companies was -12.7%/-13.4%/-13.3%/-8.7%, indicating that going global companies performed better. There is a strong fundamental logic behind this, indicating that overseas business has become an engine driving revenue and profit growth.

Returning to the growth logic of Era Angel, as a leading company in the global expansion industry, it is reflected in two aspects:

First, the demand-side logic, namely the marginal improvement of global capacity, driving the logic of its revenue expansion. In the specific context of the invisible orthodontic market, from 2020 to 2030, the global invisible orthodontic market is expected to increase from 12.2 billion US dollars to 46.2 billion US dollars, with a CAGR of 14.2%. The global invisible orthodontic market has vast potential, and the company's strong product power helps to ride the waves, solidifying the second growth curve of revenue.

Second, the supply-side logic, namely the growth logic of market space overseas and the improvement of brand penetration rate, which manifests as profit expansion. This logic also applies to Era Angel. Currently, the company's international layout has entered a period of harvest, and with the expansion of economies of scale, there is great potential for profit improvement.

Third, according to a research report by Tianfeng Securities, except for light industry manufacturing, the going global gross margin of various Shenwan first-level industries weighted by the market cap of the industry is higher than that of the domestic market, while this phenomenon is different when calculating the average gross margin of domestic/going global using a simple average weighting method, where the average going global gross margin of 7 industries is lower than that of the domestic market. This data characteristic points to the fact that the leading going global logic may have a comparative advantage. Era Angel, as an industry leader, will also have better growth logic than other companies.

In summary, based on the three growth logics mentioned above, it can be concluded that as Era Angel's global layout achievements are gradually realized, its revenue and profit will enter a new stage, gradually changing market expectations and pricing logic, helping its valuation reach new heights.