Vincent Medical Holdings Limited (“Vincent Medical” or the “Company”, together with its subsidiaries, the “Group”, stock code: 1612), a global medical devices and solutions provider, is pleased to announce its interim results for the six months ended 30 June 2024 (“1H2024 or, “the Period”).
The Group’s revenue increased by 5.4% to HK$380.7 million (1H2023: HK$361.2 million), supported by the strong performance from its imaging disposable products segment and growing contributions from the manufacturing and sales of healthcare and wellness products. Gross profit for the Period saw a modest increase of 0.3% to HK$119.2 million (1H2023: HK$118.8 million). Gross profit margin declined slightly from 32.9% to 31.3% primarily due to the changes in product mix and an increase in allowance for inventories. With prudent cost control and the reversal of income tax provision, profit attributable to owners of the Company reached HK$33.3 million (1H2023: HK$26.6 million), representing an increase of 25.1%.
In view of the Group’s resilient performance, the Board has resolved to declare an interim dividend of HK1.6 cents per share for the Period (1H2023: HK1.25 cents).
Imaging Disposable Products Segment
Fueled by deepening collaborations and robust global demand for medical imaging diagnostic services, the Group successfully capitalized on the rising demand for imaging disposable products. During the Period, segment revenue rose by 50.9% to HK$189.7 million (1H2023: HK$125.7 million), accounting for 49.8% of total revenue. Segment gross profit margin slightly decreased to 30.2% (1H2023: 30.4%) due to changes in the product mix and higher costs of key components.
Respiratory products segment
The respiratory products segment remains an integral part of the Group’s comprehensive product offering. However, due to the combination of weak global demand, the exit of key players from the sleep and ventilation market, and the absence of a respiratory disease outbreak in the PRC, segment revenue decreased by 22.6% to HK$120.4 million (1H2023: HK$155.6 million), accounting for 31.6% of total revenue.
Despite the increase in inventory allowances, segment gross profit margin improved from 36.2% to 36.8%, primarily due to the depreciation of the Renminbi (RMB) and the improvement in manufacturing efficiency, as a result of optimized production processes.
Orthopaedic and Rehabilitation Products Segment
As some of the Group’s U.S. customers were strategically cutting their reliance on foreign manufacturing, the Group’s Orthopedic and Rehabilitation Products Segment has certainly suffered. In the first half of 2024, segment revenue fell by 32.5% to HK$23.6 million (1H2023: HK$35.0 million), accounting for 6.2% of total revenue. Segment gross profit margin decreased from 37.0% to 29.9%, primarily due to reduced production scale and increased price competition.
Other Products Segment
During the Period, revenue from healthcare and wellness products increased by 56.0%, from HK$10.9 million to HK$17.0 million. Segment gross profit margin increased from 21.3% to 25.5%, as a result of the expanding product portfolio.
Other products also include moulds, surgical disposables, surgical patient warming devices and related disposables, and plastic disposable products. During the Period, revenue from these products decreased by 11.8%, from HK$34.0 million to HK$30.0 million, primarily due to the lower sales volume of surgical patient warming devices and related disposables.
Outlook
Looking ahead, Vincent Medical is committed to pursuing a diversified growth strategy, with imaging disposable and respiratory products at its core, while exploring new opportunities leveraging its technical expertise and manufacturing excellence.
Mr. Choi Man Shing, Chairman of Vincent Medical, said, “We are delighted to report another set of satisfactory results despite challenging circumstances. With the new R&D and production facility in Kaiping City already underway, and targeting a trial operation towards the end of 2025, we believe we will be more capable of developing new products, securing manufacturing intellectual properties, and offering quality products at higher efficiency and cost competitiveness in the future. That should in turn, support our customer acquisition, client stickiness, and margins performance. And as disposables demand continues to stablise and notable players exit the market, this should also open up a window of opportunities, allowing us to further solidify our market presence. We will keep a keen eye on potential opportunities, and we will remain prudent on our cost control, in preparation for future uncertainties.”
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