Endovastec(SH:688016)2024-07-03 10:11Group 1: Acquisition Overview - Heart Medical invested $21 million in OMD in March 2022, acquiring a 27.632% stake, with a post-investment valuation of $76 million [2] - The acquisition involves purchasing the remaining 72.368% of OMD's shares for $65 million, corresponding to an estimated valuation of approximately $89.82 million [2] - OMD operates two subsidiaries, Lombard UK and Lombard Germany, with three certified products in Europe and Japan [3] Group 2: Product and Market Position - OMD's products include Aorfix™, a unique abdominal aortic stent with CE, FDA, and PMDA certifications, and Altura™, the only Double-D product targeting renal artery openings [3] - The European market for aortic stent grafts is projected to reach approximately $824 million by 2029, accounting for 22.8% of the global market [12] - Heart Medical's market share in Europe was less than 2% in 2022, with plans to significantly increase this share over the next five years [12] Group 3: Financial Performance - OMD's revenue for 2022 was approximately RMB 77.7 million, increasing to RMB 111.5 million in 2023, representing a growth rate of 43.55% [4] - OMD's losses have narrowed, with a projected turnaround to profitability expected in 2024 [4][12] - The company reported a loss of RMB 24.8 million in 2022, reduced to RMB 4.2 million in 2023 [12] Group 4: Strategic Considerations - The acquisition is expected to enhance Heart Medical's operational performance and market presence in Europe [5] - The integration of OMD's management and operational systems is anticipated to be smooth due to a long-standing partnership [6] - The acquisition will allow Heart Medical to better control its international strategy and mitigate risks associated with domestic market pressures [5] Group 5: Future Outlook - Heart Medical plans to leverage OMD's established sales channels in Europe and Japan to enhance product promotion and market penetration [7] - The company aims to accelerate the certification and commercialization of new products in overseas markets post-acquisition [14] - Future revenue contributions are expected from new products, including the next-generation Meridian™ stent, which is set to enter the market soon [10]