We are the largest domestic player and the fourth largest player in terms of revenue in 2021 with a market share of 6.7% in China’s ophthalmic medical device market, which is dominated by overseas competitors and highly competitive, according to Frost & Sullivan. With over 20 years of track record, we distribute a broad spectrum of ophthalmic medical equipment and consumables, and also provide our end customers with related technical services. Our product offering covers all seven ophthalmology sub-specialties where ophthalmic medical devices are utilized for their diagnosis, treatment or surgeries, according to Frost & Sullivan. As of the Latest Practicable Date, over 4,000 end customers in China (including over 1,200 Class III hospitals and 1,500 Class II hospitals in all provincial administrative regions in China) had procured our products and after-sale services.
We distribute a broad product portfolio covering all seven ophthalmology sub-specialties where ophthalmic medical devices are utilized for their diagnosis, treatment or surgeries, being vitreoretinal diseases, cataracts, refractive surgery, glaucoma, ocular surface diseases, optometry and pediatric ophthalmology. Our product portfolio comprised Distribution Products of our brand partners and Proprietary Products which we develop and manufacture. In terms of sales in China, we primarily serve as a distributor of our Distribution Products. For the years ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2021 and 2022, the revenue contribution of our Distribution Products accounted for 98.9%, 97.0%, 72.0%, 70.9% and 70.5% of our revenue from sales of products, respectively. As of the Latest Practicable Date, we had collaborated with 19 overseas brand partners, of which 16 had entered into exclusive distribution arrangements for their products with us, including Heidelberg, Schwind and Optos. We have also gradually expanded our portfolio of Proprietary Products through our own R&D efforts and our acquisition of Teleon and Roland. The revenue contribution of our Proprietary Products increased from 1.1% in 2019 and 3.0% in 2020 to 28.0% in 2021 of our revenue from sales of products after we completed such acquisitions in November 2020 and January 2021, respectively, and it further increased to 29.5% of our revenue from sales of products for the six months ended June 30, 2022. As of the Latest Practicable Date, we had a product portfolio of 129 products.
Due to the scarcity of medical resources and limited patients’ awareness, the penetration rate of ophthalmology healthcare services in China has long remained depressed with diagnosis and treatment needs. According to Frost & Sullivan, the size of the ophthalmology patient base in China of major ophthalmic diseases in 2021 represented approximately 1.6 to 11 times of that in the United States in 2021, while the size of United States’ ophthalmic medical device market in 2020 was much larger than that of the PRC market in the same year. With a broad portfolio of products, we are able to cover the diagnosis and treatment of a broad range of ophthalmologic diseases. Coupled with our nationwide multi-channel sales network and an established ophthalmology KOL network, we believe we are well-positioned to capture the growth potentials of China’s ophthalmology healthcare industry.
We also differentiate ourselves from our competitors through our technical service capability. We are the second largest ophthalmic medical device technical service provider in China in terms of revenue from provision of technical services in 2021, according to Frost & Sullivan. Ophthalmic medical devices are highly complex, demanding extensive technical support and after-sale maintenance and therefore, the ability to provide quality and professional technical services has great commercial value and profit generating potential.
We believe investments in R&D had been and will continue to be crucial to our growth trajectory. As China’s policies continue to favor domestically produced medical devices, we have made important investments in the R&D of intraocular lens, electrophysiological equipment and optometry equipment. In particular, through our acquisition of Teleon, we inherited Teleon’s over 20 years of experience in developing intraocular lens and its world-leading intraocular lens R&D resources and platform, and core intellectual properties. Importantly, we are striving to develop our intraocular lens production capabilities in China. Through our acquisition of Roland, we inherited its electrophysiological equipment R&D capabilities and have successfully integrated Roland’s R&D teams with our R&D teams in China. As of the Latest Practicable Date, our Group had registered ten invention patents and 19 utility patents in China. As of the same date, our Group had also registered 83 patents in Hong Kong, EU and other jurisdictions, which we believe are material to our business.
Our revenues and profits remained steady during the Track Record Period and we enjoyed successive increases in our gross profit margins. For the years ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2021 and 2022, our revenue amounted to RMB1,106.7 million, RMB962.1 million, RMB1,298.2 million, RMB578.6 million and RMB577.9 million, respectively, and our gross profit was RMB463.3 million, RMB436.2 million, RMB609.5 million, RMB269.8 million and RMB281.2 million for the same periods, respectively. Our gross profit margin increased from 41.9% in 2019 to 45.3% in 2020, and further to 46.9% in 2021, and increased from 46.6% for the six months ended June 30, 2021 to 48.7% for the six months ended June 30, 2022.
Such successive improvements in gross profit margin reflected our continuous efforts to optimize our product portfolio. The gross profit margin of our ophthalmic medical consumables is higher than that of our ophthalmic medical equipment. For the years ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2021 and 2022, our gross profit margin for the sales of ophthalmic medical consumables was 52.5%, 51.8%, 51.2%, 51.0% and 60.2%, respectively. The percentage of revenue derived from ophthalmic medical consumables out of our total revenue increased from 13.4% in 2019 to 14.6% in 2020 and further to 31.5% in 2021 as a result of the acquisition of Teleon in early 2021, and it increased from 31.2% for the six months ended June 30, 2021 to 35.7% for the six months ended June 30, 2022. These drove the successive increases in our overall gross profit margin during the Track Record Period.
Source: Gaush Meditech (02407) Prospectus (IPO Date : 2022/11/30) |