High-end medical equipment stimulates rapid growth with high gross profit

With the advancement of the new medical reform and the gradual adjustment of the medical industry structure, medical devices have become the leader in the profitability of various sub-sectors in the pharmaceutical sector.

The disclosure of the three quarterly reports has revealed that the performance of pharmaceutical bio listed companies from January to September gradually opened the "red hijab." Among them, the medical device plate attracts attention. According to statistics, of the 15 A-share medical device companies that have disclosed the third-quarter earnings forecast, 13 reported that net profit had increased year-on-year, and most of the company’s performance had increased by more than 30%. Most of the top companies in the pre-increment range involve high-end medical devices.

High gross profit stimulates rapid growth <br><br><br><br><br><br><br><br><br><br><br><br><br><br> Flush data shows that in mid-2012, the gross profit margin of the medical device sector was 42.48%, which was higher than 42.35% of biological products, 41.07% of Chinese medicine, 39.80% of medical services, and 34.70% of chemical pharmaceuticals. 10.88% of pharmaceutical business levels.

In the context of the downturn in macroeconomic trends, the gross profit margin of 42.48% in the medical device sector is quite attractive to listed companies in Shanghai and Shenzhen. The first three quarterly earnings forecasts of related companies have also explained this growth potential: From January to September 2012, Davis Medical (300314) achieved net profit attributable to shareholders of listed companies increased by 65%-85% year-on-year. Bio (300298) is increased by 40%-50%, Hejiagu (300273) is increased by 35%-50%, Guanxi Bio (300238) is increased by 25%-45%, and Kelita (300326) is increased by 20%- 40%. The gross margins of the five companies disclosed in mid-2012 were 56.89%, 68.78%, 53.10%, 94.55% and 83.41%, respectively.

The steady increase in sales revenue is seen by these companies as a common cause of performance growth. As David Medical stated in its performance forecast, the company's main business has grown steadily and costs and expenses have been effectively controlled, resulting in a significant increase in company performance compared to the same period of last year. On the other hand, the net profit of medical device companies in previous periods is generally low, which also provides a basis for the rapid growth of company performance.

Big potential of high-end medical equipment <br> <br> analysis can be found in the medical device sector company, recently listed a number of advanced medical equipment company has gradually become a leader to lead the industry growth.

Among the companies with outstanding performance in the first three quarters of 2012, David Medical is mainly engaged in the treatment of neonatal jaundice, treatment kits, and non-contact oxygen hoods for infants. Sannuo Bio's main blood glucose analyzer and blood glucose monitor Test strips, etc.; Hejia's main tumor minimally invasive treatment equipment, medical molecular sieve oxygen equipment and engineering, etc.; crown gall biological is known as the "first brain tumor concept concept," the main meningeal construction - biological type hard brain ( Ridge) membrane patch, etc.; and Kelitai is the leader of percutaneous vertebroplasty and percutaneous balloon dilatation kyphoplasty.

In contrast, some listed companies that specialize in traditional medical devices are much less attractive. Among them, Jiuan Medical (002432) expects net profit attributable to shareholders of listed companies in the first three quarters to change from -50% to -20%. The downturn in the economic situation in Europe and changes in health insurance policies have been seen by the company as a major factor constraining its growth.

According to industry insiders, under the promotion of the new medical reform policy, the performance of the medical device industry companies will be differentiated or will continue to expand, and high-end medical devices are expected to continue to lead the industry. The relevant plans issued by the Ministry of Industry and Information Technology during the year also pointed out that the development of advanced medical devices, biotech drugs, new chemical drugs, and modern Chinese medicine will be promoted. Advanced medical devices are becoming hot spots in the market.