Net profit soared 17452.26%! Hot sales won 1.3 billion orders

Affected by the epidemic, the demand for medical protective equipment in overseas markets has skyrocketed, which has driven the cross-border medical industry to continue to heat up, and some big sellers have received large orders exceeding 10 billion.

Big profit! Jiuan Medical received another 1.3 billion yuan order

Recently, iHealth Medical issued an announcement stating that its subsidiary iHealthLabs.Inc and the U.S. DLA (Department of Defense Logistics Agency) signed a purchase contract on behalf of the U.S. HHS (Department of Health and Human Services) for the iHealth COVID-19 Antigen Home Self-Test OTC Kit. iHealth Medical's U.S. subsidiary will sell 72 million iHealth kits, and the total contract price and tax of the products is approximately US$191 million (including freight), equivalent to approximately RMB 1.367 billion .

iHealth said that the fulfillment of this procurement contract will have a positive impact on the company's revenue and profits this year.

In November 2021 , iHealth obtained the U.S. FDA EUA authorization for the COVID-19 antigen home self-test OTC kit.

On December 21, 2021, iHealth's US subsidiary received two iHealth test kit purchase orders from the New York State Department of Health, with a total order amount of US$65.31 million .

On January 10, 2022, iHealth and the New York State Department of Health signed a $120 million test kit sales contract .

From December 3, 2021 to January 5, 2022, iHealth received test kit purchase orders from the Commonwealth of Massachusetts and the Executive Office of the Department of Health and Human Services, with a total amount of US$148 million .

On January 13, 2022, the U.S. Department of Health and Human Services, represented by the ACC, purchased 250 million test kits from iHealth. On January 26, ACC added 104 million.

Subsequently, payments for iHealth 's overseas orders were paid one after another.

On April 14, 2022 , ACC paid a total of US$411 million, or approximately RMB 2.939 billion , to the company's US subsidiary . At that time, iHealth's US subsidiary had sold a total of 354 million iHealth test kits to ACC, with a total contract price and tax of US $1.775 billion.

Now, iHealth has received another large order of US$191 million .

iHealth’s performance continues to soar, how long can this hot product last?

Tianjin Jiuan Medical Electronics Co., Ltd. (hereinafter referred to as Jiuan Medical) was established in 1995 and was listed on the Shenzhen SME Board in 2010. In the same year , it created its own innovative brand "iHealth" during its transformation to mobile Internet .

The company mainly focuses on the research and development, production and sales of medical products such as thermometers and sphygmomanometers. Its main products include electronic medical equipment such as electronic sphygmomanometers, blood glucose meters, forehead thermometers, blood oximeters, and IVD in vitro diagnostic products.

In the third quarter, iHealth achieved revenue of 1.323 billion yuan, a year-on-year increase of 497.31 %; net profit attributable to shareholders of the parent company was 807 million yuan, a year-on-year increase of 17452.26%; net profit attributable to shareholders of the parent company excluding non-recurring items was 946 million yuan, a year-on-year increase of 4831.05%.

Looking at the performance of Jiuan Medical in the first three quarters, the growth is quite rapid. In the first three quarters of 2022, the company achieved a total operating income of 24.589 billion yuan, a year-on-year increase of 30.12 times; and achieved a net profit attributable to shareholders of 16.05 billion yuan, a year-on-year increase of 319 times .

In 2021, iHealth achieved revenue of 2.397 billion yuan, a year-on-year increase of 19.36%; operating profit of 1.003 billion yuan, a year-on-year increase of 320.2%; and net profit attributable to shareholders of the parent company of 909 million yuan, a year-on-year increase of 274.96%.

The main reason for the surge in iHealth's performance is the substantial increase in sales of COVID-19 antigen test kits . As the global epidemic situation has repeatedly occurred, the sales of epidemic prevention products have remained high, especially in the United States, where home testing is popular. The demand for COVID-19 antigen test kits has increased significantly. iHealth once revealed in its semi-annual report that iHealth's COVID-19 test kits contributed 99.08% of the company's revenue in the first half of the year.

iHealth's test kit products are mainly sold in the U.S. market by its U.S. subsidiary in both To B and To C formats. Orders mainly come from the government, commercial customers, Amazon's e-commerce platform, and the U.S. subsidiary's official website.

At present, iHealth's iHealth brand has accumulated a certain reputation on Amazon , and its iHealth test kits have firmly topped Amazon's industrial science and testing kits bestseller list .

In addition , due to the increased demand for telemedicine during the epidemic, the sales of Jiuan Medical's IoT products, such as blood pressure monitors, blood glucose meters, blood oximeters, weight scales, etc., are also growing overseas.

At present, many Internet giants are trying to enter the field of Internet medical care. With the continuous development of sub-sectors, Jiuan Medical will face greater market competition. And as the growth of the epidemic slows down, the demand for products such as test kits will also decline.

Previously, iHealth's COVID-19 antigen test kits have been distributed free of charge to tens of millions of American households through the U.S. government's distribution plan.

However, it is worth noting that the United States announced on September 2 that it would temporarily stop providing free COVID-19 test kits . The main reason for the suspension is that Congress currently does not have sufficient funds to replenish the inventory of test kits . This change in the US market may mean that the US government may no longer pay for COVID-19 antigen test kits , and it will become very difficult for iHealth to obtain government orders.

In the report, iHealth also pointed out that due to the unpredictability of the epidemic, the advancement of the vaccination plan, changes in market demand, and changes in the market competition environment, there is still uncertainty as to whether future performance can continue to maintain rapid growth. Therefore, iHealth must increase R&D investment, develop more advantageous products, enrich the product matrix, increase market share , and enhance the ability to resist various uncertain risks .

In order to adapt to market changes, iHealth has taken two major measures, not only increasing the investment in test kit products, but also increasing investment in the new "O+O" model of diabetes diagnosis, treatment and care. For test kit products, iHealth plans to use North America as the main market for test kits, while exploring new markets and planning to apply for registration in countries with high entry requirements. More new products such as home testing products and IoT health products will continue to be launched for the US market . In terms of the new "O+O" model of diabetes diagnosis, treatment and care , it is planned to open nearly 600 "joint care" centers in multiple cities in China in the next 3-4 years .

It is understood that Jiuan Medical's diabetes diagnosis and care "O+O" project mainly realizes the integration of software and hardware, offline and online, and in-hospital and out-of-hospital through "intelligent hardware + APP + cloud platform", and the project implementation is concentrated in China and the United States. The investment capital of the project is about 14.37 million yuan, accounting for 31.38% of its R&D expenses during the reporting period.

Data shows that during the reporting period, iHealth's R&D investment capitalization ratio was 40.69%, up 13.51 percentage points year-on-year, and the main reason is that the progress of the project is accelerating. However, whether iHealth's new products and diagnosis and treatment care projects can boost performance growth in the future remains to be seen.

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