Source of the article: Siyu MedTech; Editor: Zheng SiyuReprint Requirements: Please indicate the source of the article at the beginning of the text, and it can be reprinted directly.
January 12, 2024Sunnyou Medical (688626)Released "Investor Relations Activity Record Form》Announcement。ForThe first State Council executive meeting in 2024 focused on the "silver economy."Sunnyou MedicalSunnyou stated that, as a national-level pilot demonstration enterprise for smart health and elderly care applications, the company highly values the business layout of its elderly care sector.Currently, the company owns nearly a hundred types of rehabilitation medical devices suitable for elderly rehabilitation, covering areas such as rehabilitation training, physical therapy, elderly care, elderly assistive devices, functional assessment, and home-based rehabilitation. It provides solutions and equipment support for addressing common conditions or functional impairments in the elderly, including pain, insomnia, stroke, psychological issues (autism), Alzheimer's disease, Parkinson's disease, pressure ulcers, disability care, and hospice care.
▲Sunnyou Medical Partial Announcement Screenshot# Sunnyou Medical Q&A Review# Regarding the focus on the "silver economy" proposed at the first State Council executive meeting of 2024, what products and strategies does the company have in place?Answer: With the deepening of China's aging population, the silver economy, also known as the "elderly care economy," has welcomed vast market opportunities. As a national-level pilot demonstration enterprise for smart health and elderly care applications, Sunnyou places great importance on the business layout of the elderly care sector. Based on common functional impairments and complications among elderly patients, the company provides comprehensive rehabilitation equipment and geriatric (medical-care) rehabilitation solutions, as well as integrated smart health and care solutions covering areas such as "sleep assistance, standing support, mobility aids, hearing assistance, vision aids, bathing assistance, pain management, preventive healthcare, and long-term care." Currently, Sunnyou offers nearly a hundred types of rehabilitation medical devices suitable for elderly rehabilitation, encompassing rehabilitation training, physical therapy, elderly care, assistive devices for seniors, functional assessments, and home-based rehabilitation. These address common conditions or functional impairments in the elderly, including pain, insomnia, stroke, psychological issues (such as loneliness), Alzheimer’s disease, Parkinson’s disease, bedsores, disability care, and hospice care, providing both solutions and equipment support.# Why did the industry and company experience smaller growth before 2021, and why did the growth suddenly increase in 2023? Is there continuity?Answer: First, in 2022, the company was affected by unexpected factors, leading to a low base; however, the company has consistently prioritized the research and development of new products, continuously enriched its rehabilitation product line, and strengthened the layout of its marketing network and the construction of its marketing system. With the elimination of factors impacting economic development and the growth in demand for rehabilitation medical services, the company achieved growth in sales orders in 2023, driving rapid revenue growth. Second, from the perspective of the development history of the rehabilitation industry, the industry is still in its early stages of development and is a strategic emerging industry. The past decade or so has been a phase of popularizing the concept of rehabilitation in medical institutions. In recent years, driven by national policy support, aging population issues, the assessment of early intervention rates in rehabilitation, and adjustments to hospital revenue structures, the influence of the rehabilitation industry and the awareness of medical-rehabilitation integration in medical institutions have increased year by year, reflecting and continuing the rapid growth of the company and the rehabilitation industry.#May I ask about the company's future plans in the home sector?Answer: The company has established a wholly-owned subsidiary, Sunnyou Medical, and formed an e-commerce team. The current blockbuster product, the fascia gun, is already on sale, with market feedback and user reputation continuously improving. In the short term, rehabilitation therapy products such as fascia guns and electrotherapy devices, as well as products related to "sleep aid, standing aid, walking aid, hearing aid, vision aid, bathing aid, pain management, preventive healthcare, and long-term care," will be the first to extend from medical institutions to the home-use market. In the future, based on the company’s existing product lines and thorough research analysis of the home-use market, further efforts will be made to advance the homeware layout of the company's advantageous product categories.# Please explain why the impact of anti-corruption efforts on sales revenue from public tier hospitals, as a customer group, is relatively small?Answer: First, the company has always adopted a sales model dominated by indirect sales (agents/dealers) and supplemented by direct sales; Second, the market space brought by medical new infrastructure, rehabilitation department construction, and the integration of medical and rehabilitation is relatively large. The company has a marketing network and system covering all 31 provinces, autonomous regions, and municipalities in China, allowing it to benefit first from the industry's growth dividends; Third, the company is one of the few enterprises in the industry with a full range of product categories and the ability to provide integrated rehabilitation solutions covering more than 30 clinical specialties and over 50 diseases. Many of the company’s products are essential for establishing rehabilitation departments or are critical needs for clinical treatment, which means smaller individual order amounts and less procurement pressure for hospitals; Fourth, the company strictly controls the compliance of various expenses.#May I ask about the structure of the company's end customers and their revenue share?Answer: In the past three years, hospitals of grade II and above have accounted for a relatively high proportion among the company's end customers. Driven by factors such as national policy support, early intervention rate assessment in rehabilitation, adjustment of hospital revenue structure, and the increasingly severe aging problem, these hospitals represent the most premium customer base under the company’s “whole hospital, whole department, entire region, all disease types, entire population, full life process” six-all model strategic layout. The company’s business model, which deeply cultivates the entire rehabilitation track, meets current market demands. In addition to grade hospitals, non-medical clients such as military training rehabilitation, private hospitals, grassroots medical institutions, disabled persons' federations, elderly care institutions, university medical schools and sports majors’ training labs, health care, wellness, massage, chiropractic, physiotherapy, sports clinics, and medical beauty salons are also gradually increasing.# Can the company's performance targets for 2024 be referenced against the targets of equity incentives?Answer: Equity incentives are aimed at motivating key employees, and the assessment targets are not the company's expected values for performance growth in 2024. From an industry perspective, the rehabilitation medical industry is still in the early stages of rapid development. From the company’s standpoint, it continues to increase R&D investment, improve rehabilitation solutions for dozens of clinical specialties and specific diseases, and enhance sales layouts across various product pipelines. Whether considering policy direction, market demand, or internal arrangements, we are quite confident in the sustained growth of both the rehabilitation industry and the company.#Seeing that the company has an "Overseas Expansion Plan" recently, may I ask about the progress?Answer: The company currently has dozens of products that have obtained overseas market access certificates. To accelerate the process of entering foreign markets, the company has established a registration department under the International Business Department, focusing on CE, FDA, and certifications from other countries. Products such as piezoelectric shock wave, extracorporeal shock wave, and air pressure wave therapy devices, which are best-sellers in China and have received strong feedback at international exhibitions, will successively obtain CE or FDA certification. Additionally, to leverage regional technical resources, the company relies on its seven R&D centers to establish long-term scientific research cooperation with many domestic and international research institutions and enterprises. At the same time, it has set up foreign trade offices to form an R&D system geared towards global demands. With continuous investment in R&D, the company has developed multiple products that fill domestic gaps and has gained certain competitiveness in exports. For further updates, please continue to follow the company’s relevant announcements.#May I ask why the market concentration of the rehabilitation equipment industry is currently low, and is there any possibility for the company's market share to increase in the future?Answer: Whether overseas or in China, the rehabilitation device industry is characterized by a wide variety of products, small batch production, and low concentration. There are numerous manufacturers, each with their own unique features, and the development of the rehabilitation medicine sector requires the joint efforts of many participants. Currently, rehabilitation companies are relatively scattered, but increasing concentration is a trend in every industry’s development. As the market demands higher product quality and functionality, small enterprises struggle with insufficient R&D investment, facing immense survival competition for individual products. The rise in brand and market concentration will become increasingly evident. Although the R&D direction for each product may differ, under the growing demand for product connectivity and interoperability, various rehabilitation devices needed for an entire rehabilitation department—or even hospital-wide clinical rehabilitation integration—will eventually need to be managed uniformly under the hospital system, including data collection and more. Individual products can hardly meet such needs, so the brand and market concentration of rehabilitation equipment will continue to increase. Sunnyou possesses a relatively comprehensive product system in the field of rehabilitation medical devices, providing integrated rehabilitation solutions for "all specialties, entire hospitals, whole regions, entire populations, all disease types, and the entire life process." Therefore, the competition for Sunnyou's products is not just about individual products; more importantly, it involves product interoperability, spatial equipment integration, combined treatment options, and overall clinical specialty solutions. We believe that the company’s “platform attribute” advantage will provide a competitive edge as industry concentration continues to rise.
Sunnyou Medical, established in 2002, is a leading R&D enterprise in China's rehabilitation medical device industry. It was listed on the STAR Market in March 2021. The company mainly provides a full range of rehabilitation products and comprehensive solutions to various levels of medical institutions across China, including general hospitals, rehabilitation hospitals, grassroots medical institutions, as well as elderly care facilities, disabled rehabilitation centers, and welfare organizations.
The company always regards technological innovation as the primary driving force for development and is committed toOrthopedic Rehabilitation, Neurological Rehabilitation, Critical Care Rehabilitation, Pain Rehabilitation, Postpartum Rehabilitation, Medical and Elderly Care IntegrationIn fields such as independent research, production, promotion, and sales of intelligent rehabilitation equipment, assisting in building a smart health care service system covering all populations, all disease types, and the entire life process across China.
Editor-in-Chief | Zhao Qing Reviewed by | Yi He
