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Zylox-Tonbridge Reveals 2023 Interim Financial Results: Revenue Surges 50.7% YOY to 230 Million Yuan, Gross Profit Climbs to 171 Million Yuan
On August 23rd, 2023, Zylox-Tonbridge Medical Technology Co., Ltd. (2190.HK, hereinafter referred to as "Zylox-Tonbridge" or the "Company") released its financial results for the first half of 2023. The Company's revenue reached 230 million yuan, representing a YOY increase of 50.7%. The gross profit reached 171 million yuan for the reporting period, representing a stable profit margin of 74.2%. Zylox-Tonbridge reduced its research and development (R&D), sales, and administrative expense ratios significantly in H1 2023 by 13, 9, and 11 percentage points, respectively, compared with the ratios for the full year of 2022. This substantial improvement in operational efficiency is expected to increase the Company's profitability in the near future.
In H1 2023, Zylox-Tonbridge further expanded and diversified its product portfolio. As of the announcement date, the Company has developed a total of 57 products and product candidates, including 28 products approved in China and eight products approved in Europe. Through active participation in the volume-based procurement (VBP) program, the Company has been able to increase its market shares rapidly by leveraging its broad product portfolio and strong sales and marketing capabilities. During the Jan-Jun period, Zylox-Tonbridge's neurovascular intervention business generated 166 million yuan in revenue, representing a YOY increase of 48.7%. The peripheral-vascular intervention business generated a revenue of 66.1 million yuan, representing a YOY increase of 55.9%.
Dr. Jonathon Zhong Zhao, Chairman and CEO of Zylox-Tonbridge, commented, "The innovative medical device industry is currently undergoing rapid development, and we are pleased to have demonstrated our competitive advantages in innovation and operation efficiency to deliver significant growth during the first half of 2023. These advantages will allow Zylox-Tonbridge to break even in 2023 ahead of schedule which was projected in 2024 earlier this year, and to continue along the path to sustainable growth."
Identifying unmet clinical needs and developing differentiated products
The Company continued to advance its product R&D progress in the first half of 2023, enhancing the potential for long-term growth.
Driven by clinical demand-focused R&D capabilities and strong academic marketing capabilities, the Company has successfully launched a series of differentiated products to meet physicians' evolving needs. The Company launched SilverSnake® Plus Intermediate Catheter in February 2023, which is the first NMPA-approved access catheter indicated for the introduction of interventional and diagnostic devices into the vasculature under trans-radial approach(TRA). The launch of this product is expected to enhance the development of the technique of TRA in neuro-intervention treatment, bringing patients more convenient and safer treatment options. The successive launches of innovative products like the ZYLOX Octoplus® Vena Cava Filter, the ZYLOX Swan® Endovenous RFA Catheter, and the ZYLOX Swan® RFI have firmly established the Company as a leader in the field of peripheral venous treatment in China market as a domestic manufacturer.
Zylox-Tonbridge currently has 11 product candidates in the clinical stage, and 14 product candidates in the registration stage. A few key products, including Peripheral Venous Stent System, Second Generation Neurovascular Embolization Coils, and Second Generation UltraFree® DCB, are expected to be approved in 2023, which further expand the Company's product portfolio.
Enhancing quality and improving efficiency to seize emerging market opportunities
During the reporting period, the Company is committed to improving quality and efficiency, strengthening its competitive position in a fast-evolving market landscape.
With continuous dedication to high product quality and manufacturing efficiency, the Company took advantage of the implementations of VBPs. As a result of winning the biddings of provincial VBPs, the Company's Neurovascular Embolization Coils witnessed a significant increase in its market shares, which are expected to account for approximately 10% in 2023.
The Company continued to maintain its fast-growing trend in commercialization. As of the end of June, the Company has established an extensive distribution network covering over 3,300 hospitals across 31 provinces and municipalities in China. Driven by the high efficiency in commercialization, the Company's sales expense ratios for H1 2023 decreased by 9 percentage points compared with the ratios for the full year of 2022. By taking advantage of VBPs, the Company has quickly expanded the hospital access for its products.
In the overseas market, the Company generated a revenue of 6.23 million yuan, representing a YOY increase of 128.7%.
As of the end of June, the Company's products have been successfully commercialized in 19 developed overseas markets, including Germany, France, and Italy. To enhance its service to overseas customers, the Company is establishing a European warehousing and logistics center. By presenting innovative and comprehensive product solutions at some top academic conferences, including LINNC PARIS 2023 and LINC 2023, the Company has increased its branding influence in local markets. Meanwhile, the Company provided OEM services to local brands in some emerging markets by leveraging its strong research and development capabilities and advanced manufacturing platforms.
Looking forward, Zylox-Tonbridge plans to continue expanding its innovative product portfolio as well as improving operation efficiency, which will broaden its competitive edge and solidify its position as a leading vascular interventional medical device platform.