Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. is accelerating its "going global" strategy. In the first half of the year, its overseas revenue increased by 67.04% year-on-year, accounting for 8.84% of the overall revenue. A reporter from "Science and Technology Innovation Board Daily" asked the staff of Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. whether they would adjust the selling price to dealers in response to the significant reduction in the terminal price of the Castor stent. The other party refused to disclose more information on the grounds of "inconvenience to reply".
On August 26th, "Science and Technology Innovation Board Daily" (reporter Zheng Bingxun) reported that Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. (688016.SH) released its 2024 interim report, which showed a revenue of 0.787 billion yuan, a year-on-year increase of 26.63%, and a net income attributable to the parent of 0.404 billion yuan, a year-on-year increase of 44.36%.
Benefiting from this, Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. plans to distribute a cash dividend of 16.50 yuan per 10 shares for the first half of 2024, with a total planned cash dividend of 0.203 billion yuan, accounting for 50.40% of the net income attributable to the parent for the first half of the year. In 2023, Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. distributed a total of 0.248 billion yuan in cash dividends, also accounting for 50.40% of the net income attributable to the parent for that year.
Although Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. achieved high growth in the first half of the year, it received an inquiry letter from the National Medical Insurance Bureau due to the issue of excessively high prices for its core product, the Castor thoracic aortic coated stent and delivery system (Castor stent). Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. has decided to reduce the price of the product by 40% or more and ensure that the terminal price does not exceed 0.07 million yuan.
This morning, the National Medical Insurance Bureau disclosed the newly formulated prices of thoracic aortic coated stents by 12 domestic and foreign companies. Among them, the declared price of Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd.'s Castor stent (200-210mm) is not higher than 0.0715 million yuan, and the price of the Casotr stent (60-190mm) is not higher than 0.0696 million yuan.
The clarification progress announcement also shows that from 2021 to 2023, the sales revenue of Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd.'s Castor stent was approximately 0.25-0.29 billion yuan, 0.34-0.38 billion yuan, and 0.45-0.49 billion yuan respectively. The company's overall revenue for the three years was 0.685 billion yuan, 0.897 billion yuan, and 1.187 billion yuan respectively.
Although Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. achieved high growth in the first half of the year, it received an inquiry from the National Medical Insurance Bureau recently due to the issue of excessively high prices for its core product, the Castor thoracic aortic coated stent and delivery system (Castor stent). Shanghai MicroPort Endovascular MedTech (Group) Co., Ltd. has decided to reduce the price of the product by 40% or more and ensure that the terminal price does not exceed 0.07 million yuan.
Based on this calculation, the sales of Castor brackets accounted for a range of 36.50%-42.34%, 37.90%-42.36%, and 37.91%-41.28% of the revenue of shanghai microport endovascular medtech(group)co.,ltd. from 2021 to 2023.
In addition, from 2021 to 2023, the number of implanted Castor brackets was 4200-4500, 5000-5300, and 6500-7000 respectively. Taking 2023 as a sample, combined with the above tax-included sales, it can be calculated that the selling price of Castor brackets is between 0.0643-0.0754 million yuan.
shanghai microport endovascular medtech(group)co.,ltd. stated that due to the branching structure of Castor brackets, the size combinations are more complex than ordinary straight tube products. Dealers need to purchase a larger quantity of different specifications to meet the demand for emergency clinical surgeries. Therefore, the actual sales amount often deviates slightly from the corresponding implantation volume.
Reporters from "Star Market Daily" asked personnel from shanghai microport endovascular medtech(group)co.,ltd. about whether, against the backdrop of significant price reductions for Castor brackets, there will be a corresponding adjustment to the selling price for dealers. The other party refused to disclose more information, citing "inconvenience to reply".
It is worth noting that dealers have always been the core revenue channel for shanghai microport endovascular medtech(group)co.,ltd. For example, in the first half of 2024, approximately 0.786 billion yuan of shanghai microport endovascular medtech(group)co.,ltd.'s revenue came from dealers, and the revenue from the distribution model accounted for 99.90%.
What can be confirmed is that the price reduction of Castor brackets has already become the "sword of Damocles" for shanghai microport endovascular medtech(group)co.,ltd., and the impact on the performance of shanghai microport endovascular medtech(group)co.,ltd. for the second half of this year and even later seems to be foreseeable in advance.
In fact, shanghai microport endovascular medtech(group)co.,ltd. had previously issued warnings that if dealers have excess stock and future poor handling, combined with intensified market competition and other factors, shanghai microport endovascular medtech(group)co.,ltd. may face risks such as dealer returns, declining gross margins, and thus affecting business performance.
However, the reporter of the Star Daily noticed that due to unfavorable factors such as domestic procurement and price reduction, Shanghai Microport Endovascular Medtech(Group)Co.,ltd. is accelerating its expansion into overseas markets and making continuous progress.
Breakdown of Shanghai Microport Endovascular Medtech(Group)Co.,ltd.'s revenue in the first half of 2024.
From 2021 to 2023, Shanghai Microport Endovascular Medtech(Group)Co.,ltd.'s overseas business revenue was 30.1423 million yuan, 52.7198 million yuan, and 82.345 million yuan respectively, accounting for 4.40%, 5.88%, and 6.94% of the overall revenue.
In the first half of 2024, Shanghai Microport Endovascular Medtech(Group)Co.,ltd.'s overseas revenue increased to 69.6082 million yuan, a year-on-year growth of 67.04%, accounting for 8.84% of the overall revenue. In comparison, the growth rate of domestic business revenue in the first half of the year was only 23.59%, about one-third of the growth rate of overseas revenue.
By the first half of 2024, Shanghai Microport Endovascular Medtech(Group)Co.,ltd. has sold products in 34 countries including Asia, Latin America, and other countries in the Asia-Pacific region. Castor has entered 19 countries, achieving the first implantation in Greece and Colombia.