MicroPort Medical (00853.HK) Shares Drop Nearly 9% as Annual Loss Widens by ~50%; Analysts Warn of Inevitable Gross Margin Decline

Affected by the annual profit warning,MicroPort(00853) Plunged Significantly at Market Open. The stock price once dropped by 10%, hitting a low of HK$18.10, retreating to its lowest level since June 2020. The company anticipates a loss of up to US$285 million for last year, representing a 49% year-on-year increase. Zheshang Securities noted that the decline in MicroPort's gross profit margin is currently unavoidable. As of press time, MicroPort Medical fell 8.54% to HK$18.52, with a turnover of HK$0.87 billion.

On the evening of March 4, MicroPort (00853) issued an annual profit warning announcement. In 2021, it is expected that sales revenue will achieve double-digit year-on-year growth; the loss attributable to the equity shareholders of the company for the period expanded from US$191 million in the same period last year to approximately US$275 million to US$285 million, representing a year-on-year increase of approximately 44.0%-49.2%.

Regarding the losses, MicroPort explained that they were mainly attributed to the significant increase in expenses brought about by the active advancement of R&D, registration, and commercialization in businesses such as surgical robotics and heart valves; increased investments in overseas market expansion and product promotion; and the rise in costs confirmed under the share incentive plan.

Recently, Zheshang Securities pointed out that the decline in MicroPort's gross margin is inevitable. 2021 was the first year of supply for coronary stent procurement, and the gross margin of this sector has significantly contracted. In 2022, joint procurement products are also about to be supplied, and the price reduction from procurement may lead to a partial callback in ex-factory prices, slightly lowering the sector’s gross margin.