Blue Sail Medical Reports 2019 Net Profit Up 41.41% to RMB 490 Million, with Steady Growth in Cardiovascular and Protective Products Businesses

On the evening of April 14, Bluesail Medical Co., Ltd. (SZ002382, hereinafter referred to as “Bluesail Medical”) announced its financial results for the year 2019.

According to the annual report, the Company achieved an operating revenue of RMB 3,475,614,200 in 2019, representing a year-on-year increase of 31.00%; realized a net profit attributable to shareholders of the listed company of RMB 490,295,100, up by 41.41% year on year; and recorded a net cash flow from operating activities of RMB 782,789,100, a year-on-year growth of 20.55%.

In 2019, against the backdrop of a slowing macroeconomic growth rate and accelerated industrial transformation and upgrading, Bluesail Medical achieved steady performance improvement. Leveraging a development strategy driven by technological innovation and capital support, the company facilitated industrial upgrading, with its core cardiovascular and cerebrovascular business as well as its protection business both achieving steady growth.

In 2019, the Company’s cardiovascular and cerebrovascular business segment generated RMB 1,737,336,100 in revenue from cardiac interventional devices, accounting for 49.99% of its total revenue.

Bluesail Medical’s cardiovascular and cerebrovascular business is primarily operated through its subsidiary, Biosensors International. As the world’s fourth-largest company engaged in the research and development, manufacturing, and sales of coronary stents, Biosensors International has a strong technical advantage, with its Chinese subsidiary, Jiwei Medical, ranking among the top three players in China’s coronary stent market. Biosensors International’s product portfolio includes the BioFreedom series, the BioMatrix series, the EXCEL® stent, the EXCROSSAL stent, as well as PTCA coronary balloon catheters and balloon dilation catheters, benefiting over 5 million patients to date.

Building on its established business foundation, Bluesail Medical has further expanded its cardiovascular and cerebrovascular operations by advancing the R&D, global clinical trials, and regulatory registration of multiple projects, including drug-coated balloons and the cobalt-chromium alloy BioFreedom, both domestically and internationally. Additionally, the company has broadened its presence in the cardiovascular and cerebrovascular sector through strategic investments and mergers and acquisitions.

During fiscal year 2019, the Company, together with certain directors and senior executives, invested a total of RMB 101.6 million to acquire a 10.16% equity interest in Suzhou Tongxin Medical Device Co., Ltd. The parties will collaborate to advance the clinical development, regulatory registration, and market expansion of the fully magnetically levitated artificial heart “CH-VAD” in the global market. Meanwhile, the Company plans to raise no more than RMB 3.144 billion through a public offering of convertible bonds, of which approximately RMB 1.391 billion will be used to acquire and increase capital in NVT, a leading Swiss company specializing in transcatheter aortic valve replacement (TAVR) implantable devices.

Through a series of external acquisitions, Bluesail Medical has expanded from a single-product focus to offering comprehensive cardiovascular solutions covering coronary intervention, structural heart disease, and heart failure. This strategy has enriched and broadened its product portfolio in the cardiovascular and cerebrovascular medical device sector, continuously enhancing the company’s competitive strength and expanding its leading advantage in the field, resulting in a more complete industrial layout.

In terms of technological innovation, in 2019, the Company established two R&D platforms, both internationally and domestically, constructing a global three-tier R&D system: it set up its first global R&D center in the United States to support Bluesail Medical’s cardiovascular and cerebrovascular interventional medical business segment; established a new R&D center in Shanghai to focus on attracting top-tier talent from home and abroad and facilitating the localization of globally leading technologies in China; and fully leveraged the advantages of its R&D centers in Singapore and Weihai to form a 24-hour global R&D system, promoting technological innovation and the industrialization of R&D achievements, thereby equipping the Company’s future development with a high-speed engine from a global perspective.

The company also has a rich pipeline of projects under development, including cobalt-chromium alloy polymer-free drug-eluting stents, drug-coated balloons, mitral valve replacement, BA9 bioactivity studies, high-pressure balloons, intracardiac balloons, intracardiac microcatheters, and devices for special intravascular lesions, ensuring its position at the technological forefront of the cardiovascular and cerebrovascular fields.

The company plans to initiate R&D programs in the fields of therapeutic devices for structural valve disease and neurointerventional procedures, expand its global pool of engineers and R&D personnel, and further strengthen its R&D capabilities.

In the protective products segment, Bluesail Medical’s health protection glove products achieved operating revenue of RMB 16,781.566 million in 2019, accounting for 48.28% of the company’s total operating revenue, thereby maintaining a stable growth trajectory. Through independent research and development innovation, the company has continuously upgraded existing products and launched new ones, steadily expanding its market share both domestically and internationally. The total annual production capacity of health protection gloves has exceeded 18 billion units.

The company’s product sales network covers more than 130 countries across five continents, with its PVC glove market share consistently ranking first globally. While consolidating its position in mature markets, the company has actively expanded into emerging markets in Europe, the Middle East, Asia, and South America. In fiscal year 2019, it acquired over 100 new customers, further strengthening its international market share and achieving robust economic performance.

The Company is actively promoting capacity and product upgrades to expand the performance and revenue of its protective products business. The ongoing convertible bond project will allocate nearly RMB 600 million from the funds raised to health protection glove projects, specifically for the Phase III annual production capacity of 2 billion units of health protection (novel) gloves and the annual production capacity of 4 billion units of PVC health protection gloves. Upon implementation of these two projects, Bluesail Medical will increase its annual health protection glove production capacity by 6 billion units, while also expanding capacities for CPE gloves, household gloves, and other products.

In addition, the company will acquire 100% of the equity interest in Wuhan Bikair. Wuhan Bikair and its subsidiaries are dedicated to the research and development, production, and sales of various emergency rescue products, primarily first aid kits, as well as disposable health protective supplies. The company has established long-term strategic partnerships with globally renowned automakers such as Tesla, Mercedes-Benz, BMW, Audi, and Renault, while actively expanding into hospital and industrial markets; notably, it serves as Tesla’s exclusive global partner for this category. With an annual production capacity of over 10 million first aid kits, Wuhan Bikair exports its products to numerous countries worldwide and ranks as the leading first aid kit enterprise in Asia.

Technological innovation is also advancing in tandem. Through continuous innovation and R&D, the protective products division has consistently driven upgrades in manufacturing technologies, achieving particularly notable results in the deployment of online visual inspection equipment, the promotion of automatic cartoning machines, the widespread adoption of DCS data acquisition, and the implementation of exhaust gas absorption projects for environmental governance. From the source, the company has realized full-process automation and intelligence, covering raw material intake, automatic batching, DCS control, automatic demolding, automatic counting, automated logistics conveyance systems, and intelligent automated stereoscopic warehouses.

Bluesail Medical continuously expands its health protection product portfolio through independent R&D innovation and strategic investments, building a “comprehensive health protection solution” to meet the market’s diverse and integrated demands for protective products. The company’s health protection offerings have evolved from its core medical and health protection glove business to encompass multiple product series, including medical protection, disinfection and care, and emergency rescue. These products serve various sectors such as healthcare, food service, institutional protection, electronics manufacturing, and home care. As a result, Bluesail Medical has become the Chinese enterprise with the most extensive health protection product line and a leading provider of comprehensive health protection solutions in China.

According to the "World Preview 2018, Outlook to 2024" released by Evaluate MedTech, global sales of medical devices reached $405 billion in 2017, a year-on-year increase of 4.6%; sales are projected to reach $594.5 billion in 2024, representing a compound annual growth rate (CAGR) of 5.6% from 2017 to 2024. The "Report on the Development of China's Medical Device Industry (2017)" explicitly states that China has become the second-largest medical device market globally. By 2020, annual sales in China's medical device industry are expected to exceed RMB 700 billion. Over the next decade, the industry is anticipated to maintain an average annual growth rate of over 10%, indicating substantial potential for market expansion.

Amid the rapid development of China’s medical device industry, Bluesail Medical will steadily advance its “A+X” development strategy.

“A” leverages the glove manufacturing business as its foundation to expand into low-to-mid-value consumables, including medical protective gear, disinfection and sterilization care products, and emergency rescue protection, thereby evolving from the global leader in PVC gloves into a leading enterprise in China’s health protection sector. “X” builds upon cardiac stent products to extend into high-value consumables such as comprehensive coronary solutions, cardiovascular and cerebrovascular solutions, surgery, and orthopedics, aiming to establish a platform-based enterprise in the medical device industry.

In 2020, the unexpected onset of the COVID-19 pandemic, a global public health emergency, triggered an explosive growth in the medical protection industry. Market demand for medical protective supplies, such as masks, medical and protective gloves, and disinfection products, surged significantly, resulting in a pronounced supply-demand gap. In response, the Company took proactive measures to fully leverage its advantages in globalization, organizational structure, and resource integration. It comprehensively revitalized its protection business segment and accelerated the transformation and upgrading of its health protection product portfolio in marketing, innovation, supply chain management, and global operations.

In the protective products business, the company will focus on category expansion, brand building, and diversification of consumer segments to further unlock the significant growth potential of the global health protection market. Leveraging its comprehensive range of glove products as a cornerstone, the company will continuously enrich its product portfolio to provide “one-stop” holistic health protection solutions for hospitals, enterprises, and individual consumers, thereby opening up new market opportunities.

In the cardiovascular and cerebrovascular sector, the company will leverage its existing departmental platforms to closely monitor cutting-edge technological trends. It will strategically deploy leading product technologies through a dual approach of independent R&D and M&A-driven incubation, continuously expanding its medical device product portfolio. By sharing existing sales channels and platform resources, the company aims to generate synergistic effects.

Meanwhile, in line with the multi-departmental business strategy, the Company will continue to optimize its portfolio layout featuring complementary business models and risk hedging, tap into the growth potential of existing segments, and build a more comprehensive medical device industry landscape.

A+X: Bluesail Medical’s Efforts to Build a Global Multinational Medical Device Platform Company Begin to Show Results. In the future, Bluesail Medical will adhere to the dual-drive strategy of “organic growth + inorganic expansion,” deepen its presence in the medical device market, and grow into a multinational platform-based enterprise in the medical device sector that is “China-centric and globally oriented.”