With revenue of 900 million in 2021, Kangtai Medical's net profit fell by more than 40%

As the cross-border medical market continues to heat up, cross-border medical companies such as iHealth and Kangtai Medical are entering a bonus period. The increase in consumers' health awareness has increased the demand for medical device products, and the market has maintained a good growth trend.

However, compared with the substantial growth of Jiuan Medical, Kangtai Medical performed poorly in 2021. In this regard, some people can't help but ask: "Is cross-border medical care no longer popular?"

Kangtai Medical resumes healthy development, with revenue and net profit declining in 2021

Kangtai Medical belongs to the medical device industry and is mainly engaged in the research and development, production and sales of medical diagnostic and monitoring equipment. Its products cover multiple categories including blood oxygen, electrocardiogram, ultrasound, monitoring, blood pressure, analysis and testing, etc. Its profits also come from the above-mentioned products.

According to relevant data statistics, by the end of 2021, Kangtai Medical's products have been sold to more than 150 countries and regions around the world, and the above-mentioned main business revenue accounts for more than 99.57% of its sales revenue.

Like many cross-border companies that have released financial reports, Kangtai Medical 's 2021 data did not show a significant increase, but instead declined in operating income, net profit and gross profit margin. According to Kangtai Medical's 2021 financial report, Kangtai Medical's operating income in 2021 was 909 million yuan , a year- on -year decrease of 35.15%, and the net profit attributable to shareholders of listed companies was 352 million yuan , a year-on-year decrease of 42.56% .

In this regard, Kangtai Medical stated in its annual report that although its operating income and net profit have declined, there is still a significant increase compared with before the epidemic . And the company has now returned to the track of healthy and benign development . The decline in gross profit margin is also within the controllable range. It can be seen that the decline in multiple performance has not hindered the continued development of Kangtai Medical, but has given the company a buffer period, allowing it to develop more stably.

In addition to distribution, Kangtai Medical also sells its products overseas through multiple e-commerce platforms such as Amazon, eBay, and AliExpress. Its export sales exceeded 260 million from 2018 to 2021. In 2021, blood oxygen products accounted for the largest share of sales, accounting for 50.76%, with sales of 461 million yuan. The second largest share was monitoring products and electrocardiogram products, accounting for 15.75% and 10.85% respectively, with sales of 143 million yuan and 98.61 million yuan respectively.

It is worth noting that due to the reduction in the demand for epidemic prevention in various countries, blood oxygen products with the highest sales volume are also among the products with the largest decline, with a decline of 47.75%. The largest decline in analytical testing products exceeded 90%.

The sales of other main products such as monitoring, ultrasound, and ECG products have increased to varying degrees compared with the same period last year . Among them, the year-on - year growth of monitoring and ECG products exceeded 43 %, and the year-on-year growth of cardiopulmonary function and other products was particularly significant, reaching 104.37% .

In the market segments, many of Kangtai Medical's products have always been popular among overseas consumers. However, the company's sales in Europe and the United States unexpectedly declined in 2021. The American market is still Kangtai Medical's main market, with sales of 264 million in 2021 and sales in the European market of 175 million, down 51% and 26% year-on-year respectively.

Compared with the permanent markets, the company's sales in the emerging markets it has expanded to have increased significantly in 2021. It is understood that in 2021, Kangtai Medical's sales in the Southeast Asian market increased by 56% over the same period last year. Among them, sales in the Indian market increased by 42% over the same period last year, and the market still has huge development potential in the future.

Overall, despite the seemingly poor financial report data, Kangtai Medical still has high revenue and high returns, which shows that the decline is only temporary. Recently, Kangtai Medical also received good news that its new coronavirus antigen detection reagent has obtained the EU CE certification.

Nasal swab obtains EU CE certification

An announcement released by Kangtai Medical showed that its new coronavirus antigen detection reagent (self-test) (nasal swab) has obtained the EU CE certificate and completed EU registration filing, with a validity period from April 29, 2022 to May 26, 2025.

This means that its nasal swab testing reagents can be sold in EU countries and countries and regions that recognize the EU CE certification. While expanding the product sales scope, it also enables the brand to enter the European market and further enhance the company's overseas visibility.

In this regard, Kangtai Medical said that this will further enrich the company's product range, enhance its comprehensive competitiveness in the medical industry, and promote its promotion and sales in the European market. On the other hand, Jiuan Medical, which has attracted heated discussions in the industry by winning a large order of 8.1 billion US dollars, has also expanded its sales scope.

According to an announcement released by iHealth on April 29, its COVID-19 antigen home self-test kit has been authorized by the Canadian Health Agency and can be sold in Canada, which also further opens up the market for the company.

As leaders in the medical industry, iHealth and Kangtai Medical are leading Chinese medical brands overseas and demonstrating the strength of Chinese brands. However, as the epidemic becomes normalized, market dividends are gradually fading, and their future development also faces a series of challenges.

As the epidemic becomes normalized, the risks and competition faced by medical e-commerce are intensifying

Since the outbreak of the epidemic in 2020, due to the need for epidemic prevention and control and treatment, the demand for Kangtai Medical's infrared thermometers, blood oxygen products and other products has surged, resulting in a significant increase in performance that year. In 2021, as the epidemic entered the normal stage, market demand gradually became rational, and the company's performance declined. As the epidemic is gradually brought under control, the demand for related products cannot be ruled out from further decline.

At the same time, competition in the medical industry is gradually increasing, and the research and development of new products in the medical device industry faces great uncertainty. If the company fails to grasp the market development trend or makes wrong decisions in technological innovation, it will have an adverse impact on its performance.

On the other hand, Kangtai Medical's overseas revenue accounts for 80.92%, and the main settlement currency is the US dollar. It is greatly affected by exchange rates and trade policies, which will affect the company's sales and product price competitiveness.

In order to occupy a higher market share, Kangtai Medical has continuously increased its R&D, production and sales efforts based on market and customer needs, ensuring the technological advancement and quality stability of its products and continuously expanding its customer base.

In the field of cross-border e-commerce, Kangtai Medical has also continued to increase its investment, leveraging the market foundation of online platforms. The company's blood oxygen, monitoring, electrocardiogram and other products have been widely recognized and trusted by domestic and foreign customers due to their high cost-effectiveness and excellent quality.

In the face of a series of challenges in the future, Kangtai Medical said it will continue to optimize its product structure, expand production capacity, and further improve production efficiency and product quality. At the same time, it will innovate marketing strategies, strive to expand the market, and constantly tap new growth points.

The epidemic has increased the popularity of the medical industry, but on the other hand, it has also strengthened the attention of consumers at home and abroad to health and fitness. Small and medium-sized sellers can also use small areas as an entry point to keep up with market demand.

Kangtai Medical

Financial Report

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