MicroPort Orthopedics Segment Acquisition Deal. September 2011

Transcription

1 MicroPort Orthopedics Segment Acquisition Deal September 2011

2 Group Strategies Pursue Product and Technology Purchase Opportunities, Strategic Acquisitions and Alliances Continue to Enhance Brand Name and Market Position in China 1 2 Broaden Portfolio of Innovative Devices for Vascular Diseases Further Expand Brand Awareness and Sales Internationally 4 Capitalize on Opportunities Created by China s On-Going Healthcare Reform 3 Develop New Technologies and Enter Complementary Medical Device Markets 1

3 China Orthopedic Industry Overview Market Growth Potential Chinese orthopedic implant market growth (RMB billion) Drivers of this market includes: increase of entire population, aging of population; increase of disposable income, healthcare expenditures and medical insurance coverage, enhanced awareness and willingness of treatment and increase of surgeons in this field. In 2008, implant rates of trauma, spine and joint products in the US were almost 8x, 4x, and 100x higher than China, respectively E 2011E 2012F 2013E 2014E 201E China is estimated to be the 3rd largest market in 2010, and the 2nd largest in 201, surpassing Japan 3 Market Segments growing at ~18% 3 segments of the China orthopedic market in 2009 (RMB billion) Spine % Joint % Trauma is expected to become the largest and fastest growing segment. Trauma, Spine and Joint are expected to grow at a CAGR of 18.1%, 18.8% and 18.4% respectively ( E). Implantation rates for the three sectors are all expected to grow dramatically in the coming years. Competitive Landscape Others % Market Share of Top 3 Players Trauma % Trauma 27% Spine 33% Joint 44% The orthopedic market in China is highly fragmented and has witnessed consolidation trend recently. The major players are mostly MNCs and domestic public players. MNCs focus more on the high-end market with premium products and pricing; while leading domestic players compete on affordable prices and target second and third tier cities and wealthy rural areas in China. Weigao, Trauson and Kanghui are leading domestic orthopedic players, and all are listed companies. Source: Frost & Sullivan 2

4 MicroPort Orthopedics CE Certificates Name Product Status Target Markets Firestone Cervical Fusion Device CE certificate obtained Antelope Anterior Cervical Plate System CE certificate obtained Firefox Spine Posterior Fixation System CE certificate obtained Futago Thoracic-lumbar Fusion Device CE certificate obtained Reindeer Locking Compression Plate System CE application in progress Mountever Posterior Cervical Fixation System CE application in progress International market in 2011 (Contract Commitment US$3.m from EU) International market in

5 Acquisition Deal A Domestic Orthopedics Co. Major Terms of Acquisition Acquisition % Acquire 100% equity interest of the Target Consideration Cash consideration of RMB 110 million (Eqv. approximately US$17 million) Positioning of the Target Founded in 200 and is one of the important domestic manufacturers and marketers of orthopedic implants and related medical instruments, based in Suzhou, China. Covering an area of 11,000 square meters and the building area of 8,200 square meters, the factory buildings and workshops are all designed according to the manufacturing and management standards of medical appliances. Covers 2 lines of orthopedic implant products: trauma and spine. With more than 11 product series covering a wide array of orthopedic implants and associated instruments. Products are primarily sold and used in China. With distributors, cover all different tiers of hospitals in every province and areas in China (except Fujian Province). Financials (RMB million) Year 2010 Revenue 22 Net Profit (loss) after taxation 9 Source: Unaudited Internal Data Future Development Leverage on the strength and network of the Target to quickly penetrate and expand its market share in the PRC orthopedic market. Increase the marketing and R&D investment, accelerate the speed to put new product into market and improve product quality. Become major platform for MicroPort s orthopedic business. MicroPort s orthopedic business will cover 2 lines of spine, and trauma and will be diversified geographically that having balanced revenue contribution from both China and overseas markets. 4

6 Disclaimer This document is for information purposes only and does not constitute or form part of any offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for any securities of MicroPort Scientific Corporation, and no part of it shall form the basis of, or be relied upon in connection with, any agreement, arrangement, contract, commitment or investment decision in relation thereto whatsoever. FORWARD-LOOKING STATEMENTS Any information regarding the past performance of the Target is not necessarily indicative of its future performance. Certain statements made in this presentation may not be based on historical information or facts and may be forwardlooking statements due to a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, trends, new product development and governmental approvals of same, cost of capital and capital availability, competition, shifts in expected levels of income, changes in operating expenses, governmental and public policy changes, and the continued availability of financing in the amounts and terms necessary to support future business. CONFIDENTIALITY This presentation is confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.

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