Core Viewpoint - The warning letter from the FDA has placed Kangtai Medical (300869.SZ) in a position of compliance risk, as the company faces challenges in rectifying identified issues before regaining access to the U.S. market [1][2][10]. Summary by Sections Compliance Issues - Kangtai Medical received a warning letter from the FDA on October 2, following an inspection from June 9 to 12, which found that the company's medical device products did not comply with the U.S. federal regulations 21 CFR Part 820 [1][3]. - The FDA's actions are based on the inspection results, which are aimed at ensuring ongoing compliance with quality system regulations [3][10]. Impact on Revenue - The U.S. market accounts for approximately 23.84% of Kangtai Medical's revenue in 2024, which is projected to drop to 19.26% in the first half of 2025. A prolonged rectification period could significantly impact the company's overall revenue for 2025 [6][9]. - The temporary restriction on product entry into the U.S. market could lead to a loss of existing distributors as they may turn to other compliant companies [6][7]. Rectification Process - The rectification period for compliance issues typically ranges from 3 to 12 months, depending on the severity of the violations. Simple corrections may be resolved more quickly, while more complex issues could take longer [5][10]. - Kangtai Medical has not disclosed specific details regarding the violations or its rectification plan, which adds uncertainty to the timeline for regaining market access [5][6]. Industry Challenges - The situation highlights a broader challenge faced by Chinese medical device companies, which often find it easier to enter foreign markets than to maintain compliance once established [2][10]. - Recent cases of other Chinese medical device companies receiving FDA warning letters indicate a trend of compliance issues arising from cost control and operational simplifications post-market entry [10][11]. Regulatory Environment - The FDA's compliance requirements are dynamic, and companies must continuously adhere to them to avoid penalties, including potential loss of registration [10][12]. - The increasing scrutiny from overseas regulatory bodies emphasizes the need for companies to integrate compliance into their core operations rather than viewing it as a one-time requirement [12].