Iray Technology Debuts on STAR Market, Marking a Milestone for Digital X-ray Imaging Innovation

On September 18, 2020, VCBeat (WeChat ID: VCBEAT) learned that iRay Technology, a global leading supplier of advanced digital X-ray detectors and application solutions, had been listed on the STAR Market. The offering price for iRay Technology was RMB 119.60 per share, with the stock surging more than 50% at the opening, bringing its total market capitalization to over RMB 13 billion.

Eraytech, established in 2011, is a high-tech manufacturer specializing in core components for digital X-ray imaging systems. The company is primarily engaged in the research and development, production, sales, and service of digital X-ray detectors, with applications spanning medical diagnosis and treatment, industrial non-destructive testing, and security screening.

Sequoia China led the Series A financing round for iRay Technology in 2012 and further increased its stake in 2014. Following iRay Technology’s initial public offering, Sequoia China held a 14.75% equity interest in the company, making it the largest institutional investor.

After more than a decade of sustained development, iRay Technology has grown into one of the few global manufacturers of digital X-ray flat panel detectors that master four core sensor technologies: amorphous silicon (a-Si), indium gallium zinc oxide (IGZO), complementary metal-oxide-semiconductor (CMOS), and flexible substrates. The company provides X-ray technology and services to renowned medical imaging equipment enterprises in over 70 countries and regions. Over the past three years, iRay Technology has consistently ranked first in its domestic niche market and has established a leading position in select segments of the global market.

Zhou Kui, Partner at Sequoia Capital China, recalled: “When we first encountered iRay Technology, our investment decision was made swiftly. Over the following nine years, we consistently increased our stake and maintained a firm holding. We believed that China had the opportunity to produce a globally leading company in the field of key components for digital imaging, and iRay Technology was the most promising contender in the market. Throughout these nine years, we have witnessed iRay Technology’s exceptional leadership team, outstanding R&D and innovation capabilities, and the increasingly broad application opportunities for digital imaging technology in both healthcare and industrial sectors. Today, we are even more optimistic about iRay’s development prospects. With the broader platform and enhanced resources available post-IPO, the company is better positioned to attract talent, support partners, develop innovative products, and create superior value for customers across various fields worldwide.”

Dr. Gu Tie, Chairman and General Manager of iRay Technology, stated, “With the Company’s official listing on the STAR Market and the securing of ample ‘ammunition’ through capital market financing, iRay Technology has moved one step closer to becoming a global leader in digital X-ray detectors. In the future, the Company will continue to uphold its vision of ‘bringing the safest and most advanced X-ray technology to every corner of the world,’ adhere to its core values of ‘innovation, excellence, collaboration, and win-win cooperation,’ build a world-class industrial chain for core radiological imaging technologies and components in China, and create greater value for customers worldwide.”

Medical imaging is the largest sub-segment of China’s medical device market. Research estimates that by 2023, the market size of China’s medical imaging equipment industry will reach RMB 111.3 billion. Beyond the healthcare sector, digital X-ray detectors have a wide range of applications, extending to various fields such as industrial non-destructive testing and security screening.

Prior to 2010, the global technology and market for digital X-ray detectors were largely monopolized by foreign industry giants. The unit price of X-ray detectors once reached hundreds of thousands of yuan. As a typical high-tech product, their performance directly impacts the imaging quality of entire Digital Radiography (DR) systems. High barriers to entry in this industry are constituted by factors such as its multidisciplinary nature, high R&D difficulty, long development cycles, and stringent process control requirements.

This situation was broken by iRay Technology in 2011. iRay Technology pioneered the development of China’s first digital X-ray flat panel detector based on amorphous silicon TFT sensors, and has since continuously engaged in R&D and exploration, achieving rapid breakthroughs in products and technology. It has now become a benchmark enterprise in the industry. In particular, its market share in general medical radiography remains at a leading position globally.

Since the beginning of this year, “new infrastructure” has become a buzzword in China’s economy, and the “new infrastructure” initiative in the healthcare sector has gradually commenced. As an essential product for pulmonary imaging examinations, digital radiography (DR) systems have seen a surge in demand during the COVID-19 pandemic, particularly mobile DR units, which have been widely adopted due to their ability to be freely moved and used within isolated areas such as intensive care units (ICUs) and infectious disease wards. The wireless flat-panel detectors developed by iRay Technology are core components of mobile DR systems, and their demand has risen sharply in tandem with the impact of the pandemic.

Following the outbreak of the epidemic, iRay Technology responded swiftly. Its production base in Taicang, Jiangsu Province, resumed operations ahead of schedule during the Spring Festival holiday, urgently arranging for employees to return to work. In the first quarter of 2020, the company delivered more than 1,900 sets of its general radiography wireless series products to domestic customers, contributing to alleviating the severe shortage of medical equipment in certain regions. Meanwhile, the rapid spread of the epidemic overseas also drove a surge in demand for X-ray imaging equipment abroad. Affected by the bulk delivery of new products to strategic key accounts in the fourth quarter of 2019 and the global impact of the pandemic, iRay Technology’s operating revenue and net profit attributable to shareholders from January to June this year reached RMB 385 million and RMB 110 million, respectively, representing year-on-year increases of 91.67% and 330.28%. The company expects its operating revenue for the period from January to September 2020 to range between RMB 525 million and RMB 585 million, with net profit attributable to shareholders estimated at RMB 135 million to RMB 160 million.

Over the past decade, iRay Technology has accumulated 184 patents, including 71 invention patents, and mastered core technologies such as sensor design and manufacturing processes, scintillator materials and packaging techniques, readout chips and low-noise electronics, intelligent X-ray detection and acquisition, detector physics research, and medical image algorithms.