MicroPort NeuroScientific (2172) H1 2023 earnings summary

Executive summary

• H1 2023 revenue reached RMB299.2 million, up 45.2% YoY; operating profit rose to RMB82.2 million and net profit turned positive at RMB58.0 million.

• Products supported ~145,000 procedures in more than 2,800 hospitals; products entered over 200 new hospitals, including more than 100 grassroots hospitals.

• Overseas revenue was RMB15.0 million, up 27.3% YoY; products were commercialized in 12 countries, with direct sales launched in Ireland and the UK.

Financial highlights

• Revenue rose 45.2% YoY to RMB299.2 million; gross profit increased 64.4% to RMB232.6 million.

• Operating profit rose 505.2% to RMB82.2 million; net profit was RMB58.0 million versus a prior-year loss of RMB93.7 million.

• Gross margin was 77.8%, up 9.1 percentage points YoY, reflecting higher in-house product mix, supply-chain improvements and scale benefits.

• R&D costs rose 71.9% to RMB84.5 million and distribution costs rose 65.9% to RMB55.9 million; administrative expenses fell 11.2% to RMB28.2 million.

• Finance costs fell 97.8% to RMB2.0 million; prior-year finance costs included RMB87.0 million of non-cash preferred-share interest that ceased after the July 2022 listing.

Outlook and guidance

• Priorities include expanding product coverage through R&D and external cooperation, improving manufacturing efficiency and affordability, and increasing production capacity.

• Plans include expanding overseas registrations and sales teams, considering overseas R&D and production centers, and deepening international cooperation.

• Four products received NMPA marketing approval from early 2023 to the report date; registration applications for three additional products were submitted.