Recently, the oximeter was out of stock, and Hu Kun, the richest man in Qinhuangdao, whose net worth has shrunk by 53.4 billion yuan, took the last train of the new crown to make wealth again.
On August 24, 2020, Kangtai Medical , a medical device company established in 1996, created a miracle in the A-share market. In the context of the continuous spread of the new crown epidemic, relying on the sales of infrared thermometers and oximeters, Kangtai Medical once surged by more than 2800% on the day it went public, hitting a historical record of 307.75 yuan in the market, with a total market value of 123.816 billion yuan. At the close of the day, Kangtai Medicine finally rose by 1058% to close at 117.5 yuan. For the whole year of 2020, its operating income and net profit were 1.401 billion yuan and 613 million yuan, respectively, with year-on-year growth rates of 261.84% and 731.37%, respectively.
As the founder and actual controller, Hu Kun holds 46.84% of the equity of Kangtai Medicine, and his wealth has rapidly increased to about 58 billion yuan. He has been crowned the richest man in Qinhuangdao and ranked 105th in the “2020 Forbes China 400 Rich List”.
Kangtai Medical’s oximeter has always been its main source of revenue, and the company’s blood oxygen products accounted for 63.64% of its revenue. In 2020, the revenue of blood oxygen products will be about 883 million yuan, a year-on-year increase of 708.00%; the revenue of analysis and testing products will be about 232 million yuan, a year-on-year increase of 2714.77%. From the perspective of sales, the company’s sales of blood oxygen products in 2020 will be about 15.604 million units, a year-on-year increase of 824.68%; sales of analysis and testing products will be about 1.4403 million units, a year-on-year increase of 7538.57%.
We must know that before the epidemic, Kangtai Medicine’s performance growth was struggling. From 2016 to 2019, the operating income of Kangtai Medicine was 442 million yuan, 398 million yuan, 363 million yuan, and 387 million yuan, respectively, and the net profit attributable to the parent was 103 million yuan, 77 million yuan, 62 million yuan, and 74 million yuan. , The operating income and net profit attributable to the parent company in 2019 were even lower than the level in 2016.
The first car of the new crown to create wealth entered the station, and Hu Kun sat firmly in the first class cabin, changing from the previous silence, and the scenery was infinite. But good times don’t last forever. After a lapse of one year, the results showed up. For the whole year of 2021, Kangtai Medical achieved operating income of 909 million yuan and net profit of 352 million yuan, a year-on-year decrease of 35.15% and 42.56%, respectively.
The decline in revenue and net profit triggered stock price shocks. Since 2021, Kangtai Medical has fallen by 67% cumulatively, and its total market value has dropped by 34.3 billion yuan, making it the worst-falling stock in the medical device field. During this period, Kangtai Medical’s shareholders, directors, supervisors and executives reduced their holdings by 29.24 million shares, accounting for about 7% of the total share capital, on the first anniversary of listing on August 24, 2021. Shareholders and executives collectively reduced their holdings, which further exacerbated the panic in the market. On August 24 and 25, Kangtai Medical plunged 12.53% and 14.95% respectively.
The performance of Kangtai Medicine has not shown a positive trend. In 2021, Kangtai Medical’s blood oxygen products contributed 50.76% of total revenue, with sales of 10.309 million units, a year-on-year decrease of 33.93%; sales of 461 million yuan, a year-on-year decrease of 47.75%; and production volume also decreased by 35.31% %, but the inventory increased by 30.33% year-on-year.
This year, the Indian epidemic eased the performance pressure of Kangtai Medicine. In 2021, an epidemic broke out in India, and there was a shortage of medical supplies such as medical oxygen. Kangtai Medical increased the sales of medical oxygen concentrators, pulse oximeters, monitors and other products in the Indian market. Sales in the Indian market increased by 42% year-on-year. %. But the Indian market is just a breath of relief for Kangtai Medicine, which is heavily dependent on the US market.
After two years of listing, the share price of Kangtai Medical was 24.22 yuan per share, a drop of more than 90% from the highest point of 308 yuan per share on the first day of listing. Hu Kun’s wealth has shrunk from about 58 billion yuan at the peak to 4.6 billion yuan, a total decrease of about 53.4 billion yuan.
On October 26 this year, Kangtai Medical released its third quarter report for 2022. The operating income in the first three quarters was 462 million yuan, a decrease of 35.75% from the same period last year; the net profit attributable to shareholders of listed companies was 174 million yuan, a decrease from the same period last year. 39.53%. The market value fell to 9.6 billion yuan that day.
For Hu Kun, there are blood oxygen products in success and blood oxygen products in failure. In the first half of this year, the operating income of Kangtai Medical’s blood oxygen products was 154 million yuan, a decrease of 45.32% from the same period last year; the gross profit margin was 39.3%, a decrease of 7.31% from the same period last year. Based on the revenue and sales data of blood oxygen products in 2021, the average price of the blood oxygen meter is 44.7 yuan, so it can be inferred that the sales volume in the first half of this year will be 3.445 million units. Obviously, it will be difficult to complete the achievement of 7 million units in the second half of the year. Sales volume of 10.309 million units in 2021.
With the release of the domestic epidemic, the phenomenon of “silent hypoxia” among the elderly is frequent, which is life-threatening. At the same time, the “Ninth Edition of the Diagnosis and Treatment Plan for Novel Coronavirus Pneumonia” also mentioned that blood oxygen saturation lower than 93% is one of the references for severe patients. For the key population of the new crown, if the blood oxygen saturation is lower than 93%, you need to seek medical treatment in time. Therefore, monitoring blood oxygen indicators is very important.
As the most economical and effective instrument for detecting blood oxygen, the oximeter has become a popular anti-epidemic material. Baidu Index shows that from December 19 to December 25, 2022, the daily average search index for oximeters is 26,922, a year-on-year increase of 9,151%. E-commerce sales data also shows that the sales of oximeters of multiple brands have increased by about 100% month-on-month in the past month. Oximeters on major e-commerce platforms and most stores are out of stock, and some models are in pre-sale status. In addition, the price of oximeters has generally increased.
The life-saving straw that saved Kangtai Medicine appeared again. In recent trading days, its share price has risen sharply many times. As of the close on December 28, Kangtai Medical reported 35.36 yuan per share, and its market value returned to 14.2 billion yuan.
In order to seize this wave of dividends, Kangtai Medical worked overtime to produce oximeters, with a daily production capacity of more than 100,000 units/set. Based on the unit price of 120 yuan after the price increase, the single-day revenue exceeded 12 million. The oximeter has once again become the pillar of Kangtai Medical’s performance.
In 1996, 27-year-old Hu Kun resigned from his public office and went to sea to establish Kangtai Microelectronics, the predecessor of Kangtai Medicine. Kangtai Medical, which lived in Qinhuangdao before the epidemic, is far less famous than Mindray Medical , Yuyue Medical and other medical equipment leaders, and its popularity is limited to Hebei Province.
As a medical device company, although it is dubbed as a high-tech enterprise, Kangtai Medicine does not have many core technology patents. Most of the more than 300 patents are concentrated in utility models and design patents. It does not produce large-scale equipment and high-end medical equipment. Conventional products with low-end and price advantages. Compared with global medical device companies such as Medtronic, Johnson & Johnson, Abbott, and Siemens, Kangtai Medical is less competitive in terms of technology and technology. Domestic medical institutions are more inclined to import products.
Compared with domestic listed companies in the same industry, Kangtai Medicine’s R&D investment is also at a low-to-medium level. Financial data shows that Kangtai Medical’s research and development expenses from 2018 to 2021 were 34.3948 million yuan, 40.5675 million yuan, 48.7372 million yuan, and 66.0649 million yuan, the least among peer companies. The average annual R&D investment of Yuwell Medical, Libang Instruments , and Sinocare Biotech exceeds 100 million yuan. Among them, Libang Instruments’ R&D expenses in 2020 will reach 218 million yuan, and Yuwell Medical’s 2020 R&D expenses will exceed 400 million yuan.
In such a market competition environment, Kangtai Medical, which is more like an electronics manufacturer, chooses to export conventional medical products overseas, of which the US market is its largest market. Before listing, 70% of Kangtai Medicine’s profits came from overseas. However, in recent years, Sino-US trade frictions have continued, which has also brought performance problems to Kangtai Medicine and Hu Kun. In its financial report, it attributed the decline in performance in 2021 to Sino-US trade frictions.
In addition, the industry is also very dependent on policy. In 2016, the National Health and Family Planning Commission launched a policy to improve the service capacity of village clinics. Kangtai Medical seized the opportunity of provincial, municipal and county-level health authorities to collectively purchase health all-in-one machines, and created as many as 120 million in 2017-2019. The revenue of RMB 100,000 laid the foundation for the listing. Such opportunities do not come often. If Kangtai Medical’s technological innovation stops, it will be difficult to seize such opportunities in the future.
The outbreak of the epidemic has allowed this unknown company to take off, and even become the strongest bull stock in 2020. The founder Hu Kun also experienced a surge in wealth, but this is also doomed to the company’s ups and downs like the new crown epidemic. I don’t know if the panic buying of oximeters will bring Kangtai Medicine back to life.
This article is from the WeChat public account “Business People” (ID: biz-leaders) , author: Huo Huo, 36 Krypton is authorized to publish.
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