Shanghai United Pictures Medical Technology Co., Ltd. (hereinafter referred to as "United Pictures Medical"), a leading player in the field of domestic medical imaging segmentation, recently updated its prospectus and launched a final sprint to the Science and Technology Innovation Board, sponsored by CITIC Securities and CICC.
The IPO of United Pictures Medical intends to raise 12.480 billion yuan, which has not been seen in the A-share market for a long time. According to the prospectus, after the full exercise of the over-allotment right, Lianying Medical plans to issue 115 million shares, accounting for no less than 10% of the total share capital after the issuance and not more than 13.71%. Based on this calculation, its issuance valuation is about 100 billion yuan.
Red Star Capital Bureau noted that although Lianying Medical has launched more than 80 products, and many of them are "domestic firsts", it is actually driven by the needs of epidemic prevention and control, and it will achieve a performance turnaround in 2020. In addition, compared with overseas industry giants, there is still a big gap between Lianying Medical and overseas industry giants, especially in high-end products.
Visitors view a positron emission computed tomography (PET) CT machine produced by Lianying Medical on April 18, 2019. Image according to IC photo
The need for epidemic prevention and control has driven the company to achieve a turnaround
Founded in March 2011, United Pictures Medical is mainly engaged in high-end medical imaging equipment. In the industry, it is believed to be the only domestic medical imaging equipment manufacturer that can challenge the three overseas giants GE Healthcare, Philips Medical and Siemens Healthcare (collectively referred to as "GPS").
According to the official website, the project of "Independent Development and Industrialization of High-field Magnetic Resonance Medical Imaging Equipment" of United Pictures Medical has won the first prize of the National Science and Technology Progress Award in 2020. This is the first time that the high-end medical equipment industry has won the highest honor in this field of science and technology.
At present, Lianying Medical has launched more than 80 products to the market, including magnetic resonance imaging system (MR), X-ray computed tomography system (CT), X-ray imaging system (XR), molecular imaging system (PET/CT, PET/MR), medical linear accelerator system (RT) and life science instruments, including "industry firsts" and "domestic firsts".
From the perspective of operating performance, 2020 has become an important turning point for Lianying Medical, with revenue nearly doubling year-on-year and net profit turning losses into profits.
According to the latest disclosed prospectus, from 2019 to 2021 (reporting period), Lianying Medical achieved revenue of 2.979 billion yuan, 5.761 billion yuan and 7.250 billion yuan respectively, with a compound growth rate of 56.03% in revenue, and the corresponding net profits in the same period were -48.0476 million, 937 million and 1.404 billion, respectively.
For the performance growth of Lianying Medical in 2020, the demand for epidemic prevention and control is a very important influencing factor. Lung imaging examination by CT and mobile DR products is an important way to diagnose the new crown, which has promoted the large number of configuration needs of MEDICAL institutions for CT and mobile DR products in a short period of time, and has also greatly increased the sales revenue of such products.
In 2020, the sales volume of the CT series products reached 1277 units, an increase of 663 units over 2019, and the sales revenue increased by more than 1.5 billion yuan; DR products sold 1556 units, an increase of 133.28% over the 667 units in 2019, and the sales revenue increased by 142.15% year-on-year.
However, due to the service life of CT and DR of 5-10 years, the surge in demand caused by the prevention and control of the new crown epidemic has released some of the new purchase demand in the coming period to a certain extent, which may affect the company's sales revenue in the next few years.
In addition, Red Star Capital Bureau found that United Shadow Medical also disclosed the government subsidies received from the company during the reporting period, which were 306 million, 348 million and 438 million, respectively, with a total of more than 1 billion yuan in subsidies in 3 years.
There is still a gap compared to industry giants
According to China Insight Consulting data, the global medical device market has exceeded $440 billion in 2020, and China has become the world's second largest market with a market share of 23%. It is estimated that by 2030, the global medical device market size will exceed $800 billion.
Compared with the global medical device market, China's medical device market is relatively developing more rapidly. Driven by factors such as the improvement of national living standards and the aging of the population, from 2015 to 2020, the size of China's medical device market has grown from 312.55 billion yuan to 778.93 billion yuan, with an annual compound growth rate of about 20.0%. It is estimated that the size of China's medical device market will exceed 2,200 billion yuan in 2030, and the compound annual growth rate of 2020-2030 is expected to reach 11.2%.
From the perspective of industry competition, the current global medical imaging market, "GPS" (GE Healthcare, Philips, Siemens Medical) occupy 60%-70% of the market, especially in the high-end medical imaging market, "GPS" is in an absolutely leading position.
According to the data of China Insight Consulting, according to the number of new sales units, in 2020, Lianying Medical has become the largest MR equipment manufacturer in the Chinese market and a leading international manufacturer. In China's 1.5T MR equipment market, Lianying Medical ranks first in market share; but in China's 3.0T and above MR equipment market, "GPS" occupies more than 80% of the market share, and Lianying Medical's market share can only rank fourth.
In addition to wrestling with overseas giants, Lianying Medical is also facing Mindray Medical (300760. SZ) and other rival competition. According to the data of the prospectus of Lianying Medical, from the current revenue scale, there is a large gap between the company and Mindray Medical and the international giant "GPS".
From the perspective of R&D expenses, the R&D expenses of Lianying Medical increased from 690 million yuan in 2019 to 1.048 billion yuan in 2021, but the proportion of revenue fell from 23.17% to 14.45%. In contrast, Siemens Healthers and GE Healthcare's R&D expenditure in 2021 reached 1.546 billion euros and 847 million US dollars, respectively.
In addition, Lianying Medical is currently unable to get rid of the external dependence of the core original. According to the prospectus, the company's core components such as ball tubes and high-voltage generators for the production of CT products, X-ray tubes, high-voltage generators and flat panel detectors for the production of XR products, and magnetrons for the production of RT products are still mainly purchased.
In this IPO, Lianying Medical intends to raise 12.480 billion yuan, of which 6.168 billion yuan will be used for "next-generation product research and development projects", which is greater than the company's research and development expenditure in the previous four years combined.
Whether United Shadow Medical can successfully pass the meeting, Red Star Capital Bureau will continue to pay attention to it.
Red Star News comprehensive report reporter Yu Yao Yu Dongmei
Responsible editor Ren Zhijiang
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