Recently, Huitai Medical released its latest semi annual report, with a total revenue of 1 billion yuan in the first half of 2024, a year-on-year increase of 27.03%; Net profit of 343 million yuan, an increase of 33.09%; The non net profit attributable to the parent company was 328 million yuan, an increase of 35.2%. This is the first semi annual report of Huitai Medical after being acquired by Mindray Medical, and it still maintains a high growth trend. The combination of competitive advantages and cost-effectiveness brought by strong cooperation, and being in an important window of domestic substitution, can Huitai Medical achieve rapid development without speed limit from now on?

Strong collaboration
Being able to be acquired by the industry leader itself indicates that Huitai Medical is excellent enough. On January 29th, Mindray Medical announced that it had acquired a total of 14.1203 million shares of Huitai Medical held by Cheng Zhenghui and others through its subsidiary Shenmai Control through an agreement transfer, accounting for 21.12% of Huitai Medical's total share capital, with a total transfer amount of 6.652 billion yuan. After the completion of the transaction, Shenmai Control and its concerted action parties directly or indirectly held 16.4556 million shares of Huitai Medical, accounting for 24.61% of the total share capital. The controlling shareholder of Huitai Medical was changed to Shenmai Control.

The focus of the market's attention on this most "bold" merger and acquisition transaction in 2024 is not the first "A-shares" on the Science and Technology Innovation Board; This is not the first domestic merger and acquisition of Mindray Medical since its A-share listing, but is Mindray Medical buying expensive? Based on the market value of the acquisition at that time, the premium for this transaction was approximately 25%. Although premium acquisitions are common in the capital market, market trends have diverged. Months after the acquisition, we still haven't received a standard answer.

But if we carefully study the development trend of Huitai Medical, the answer may be self-evident.

In recent years, Huitai Medical has experienced significant growth, with total revenue increasing from 153 million yuan in 2017 to 1.65 billion yuan in 2023, with a compound annual growth rate of 48.64%; The net profit increased from 34 million yuan in 2017 to 534 million yuan in 2023, with a compound annual growth rate of 58.25%.

Its core products are mainly divided into electrophysiology, coronary access, peripheral intervention, OEM, and non vascular intervention categories. In the first half of 2024, Huitai Medical did not disclose the revenue situation of each business segment. From the perspective of revenue structure in 2023, coronary artery access revenue accounted for the majority, electrophysiology accounted for 22%, peripheral intervention accounted for 15.59%, and OEM accounted for 12.79%.

As of the end of the first half of 2024, Huitai Medical has obtained 91 domestic medical device registration certificates or filing certificates, including 60 Class III medical devices; Obtained EU CE certification for 15 products and completed registration and market access in over 90 other countries and regions.

In the field of vascular intervention and electrophysiological consumables in China, Huitai Medical has gradually grown into a leading enterprise in the industry. The trend of domestic substitution is very rapid, and the prospects are very optimistic.

Coronary artery+peripheral dual wheel drive
Vascular intervention is the largest sub category in the high-value consumables market. The medical devices used in coronary intervention therapy mainly include coronary stents and coronary access products. Currently, Huitai Medical has established a complete coronary access product line, mainly used for PCI surgery. According to statistics and calculations from Zhuoshi Consulting, coronary stents and balloons, as supporting devices, will be one of the largest medical device segments both currently and in the future.

Huitai Medical's coronary access product line can meet the clinical needs of the first three important steps of PCI surgery. Its main products include contrast catheters, contrast wires, vascular sheaths, guide wires, guide catheters, microcatheters, balloon catheters, extension catheters, etc.

Many of these products have the advantage of being first released: the coronary thin-walled sheath (vascular sheath group) is an exclusive domestic product; The microcatheter (coronary artery application) and adjustable valve catheter sheath (catheter sheath group) are the first domestically produced similar products to obtain registration certificates in China; The anchored balloon dilation catheter is the first innovative medical device in China that uses balloon anchoring for catheter exchange inside the guiding catheter;

Pre molded guide wire is the first domestically produced guide wire that has been pre molded and bent.

In addition, in the past year, several products of Huitai Medical have been gradually included in the volume based procurement catalog, achieving "price for quantity": in November 2023, Henan Province led the centralized procurement of general interventional consumables in 19 provinces, and its contrast catheter, contrast wire, vascular sheath, catcher, and Y-connector were selected; In the December "3+N" alliance medical consumables procurement, the company won the bid for coronary microcatheters and peripheral thrombolysis.

Compared with coronary intervention, peripheral vascular intervention therapy is still in its early stages of development in China. At present, the peripheral vascular intervention market, whether arterial or venous, is mainly dominated by foreign brands, and the domestic product line is still in the stage of product improvement and completion.

Through the successful industrialization of coronary artery access products, Huitai Medical has established a mature and complete platform for the industrialization of vascular intervention devices, and officially launched peripheral vascular intervention products in 2019.

At present, peripheral interventions are mainly divided into two directions: tumor embolization intervention therapy and peripheral vascular intervention therapy. The products mainly include microcatheters, micro guide wires, TIPS puncture kits, etc. Among them, the peripheral adjustable valve catheter sheath is the only domestically produced product approved for market, and the contrast balloon is the first domestically produced product that can be used to occlude blood vessels. It has important applications in preventing the reflux of embolic agents and in pressure measurement, bleeding occlusion, and other fields.

In April 2023, Huitai Medical's innovative product - RescSeal thoracic aortic stent graft system - was officially approved for market, suitable for endovascular intervention treatment of Stanford B-type aortic dissection. The launch of this product marks the expansion of Epert Medical from vascular access products to aortic treatment products, and is an important milestone in the national industrialization of the overall solution for aortic intervention therapy.

In the next 3-5 years, with the launch of Huitai Medical's in development products for vena cava filters, the gap with foreign brands will further narrow. At the same time, with the implementation and upgrading of products such as contrast kits, second-generation microcatheters, protective umbrellas, and guide sheaths, it is expected that the overall peripheral intervention will accelerate the development of domestic substitution.

The surging electrophysiological blue ocean
The advantages of electrophysiological surgical treatment have gradually been clinically validated, and the number of electrophysiological surgeries in Chinese patients with rapid arrhythmia continues to increase, but the overall penetration rate is still relatively low.

In the field of electrophysiological devices, Huitai Medical is the first domestic manufacturer in China to obtain market access and enter clinical applications for electrophysiological electrode catheters, controllable radiofrequency ablation electrode catheters, and floating temporary pacing electrode catheters, breaking the monopoly of foreign products in this field.

The 3D cardiac electrophysiological mapping system adopts the international mainstream magnetic electric fusion positioning principle, innovatively integrating the commonly used 3D mapping system, multi-channel recorder, and stimulator functions in electrophysiological surgery, greatly improving surgical efficiency and pushing the development of cardiac electrophysiological mapping systems to a new height.

In the first half of 2024, Huitai Medical completed approximately 7500 three-dimensional electrophysiological surgeries in over 800 hospitals, with a growth rate of over 100% during the same period. At present, the adjustable curved ten pole coronary sinus catheter continues to maintain its leading market share in this category, and the adjustable curved sheath tube has been approved through a volume based procurement project, with usage exceeding 5000 units in the first half of the year.

In terms of pipeline research, Huitai Medical has obvious advantages in the layout of pulse electric field ablation. Currently, the electrophysiological product line has research projects such as pulse ablation catheter, pulse ablation device, high-density mapping catheter, pressure radiofrequency device, etc., all of which are in the clinical trial stage and are expected to be approved in 2025.

Source: https://news.yaozh.com/archive/44105.html