Minimally Invasive Medical: Some of its business will be sold in 2025

Recently, Microport Medical stated that it will actively promote the divestiture of non-core businesses in 2025, including business segments such as surgery, urology, and ophthalmology.

It is worth noting that in 2024, Microport Medical has achieved a profit contribution of 115 million US dollars by reorganizing non-core businesses such as surgery, urology, and ophthalmology. Entering 2025, the company plans to further divest loss-making businesses and promote the listing and financing of its subsidiaries such as Heart Pulse Medical and Minimally Invasive Heart Rhythm.

So, in the current context of increasingly fierce competition in the medical device industry, can the series of strategic adjustments made by Minimally Invasive Medical find new growth paths in the complex market environment?

01

Divest non-core businesses and focus on core competitiveness

Minimally Invasive Medical recently stated that it will actively promote the divestiture of non-core businesses in 2025, including business segments such as surgery, urology, and ophthalmology. The company plans to introduce strategic investors to jointly incubate these businesses and promote their further development. In addition, Microport Medical is actively seeking opportunities to sell equity in its joint venture business. Although the specific details have not been disclosed due to commercial sensitivity, the company's exploration in the primary market has never ceased.

This decision stems from Minimally Invasive Medical's in-depth examination of its own business structure. In recent years, minimally invasive medical business has been widely deployed, but the continuous losses of some non-core businesses have brought pressure to the overall performance.

After divesting non-core businesses, Minimally Invasive Medical has concentrated its resources on core areas such as coronary arteries, surgical robots, and orthopedics. For example, coronary artery business integrates active and passive products such as stents, balloons, and rotary grinding catheters, forming an integrated operation of R&D, supply chain, and marketing. The surgical robot business relies on the Tumai system and expands into markets such as the Middle East and Latin America through a group sales team.

It is understood that in 2024, Microport Medical has carried out a one-time divestiture or reorganization of 10 non-core businesses, contributing approximately 115 million US dollars to the profit statement. It is expected that by 2025, this figure will increase further.

Industry analysts believe that these measures not only help improve the company's financial situation, but also enable the company to focus more on business areas with competitive advantages and achieve sustainable development.

02

The performance has significantly reduced losses, but growth remains challenging

Looking back at the performance of Minimally Invasive Medical, the company has faced considerable challenges in the past few years. Due to the sharp drop in the prices of core products such as heart stents caused by the centralized procurement policy, its revenue structure has been impacted. Since 2020, it has suffered consecutive losses, with the loss amounts being -1.248 billion yuan, -1.763 billion yuan, -3.04 billion yuan and -3.383 billion yuan respectively. The cumulative losses have exceeded 10 billion yuan.

However, 2024 became a turning point for the performance of Minimally invasive medical. Microport Medical's 2024 financial report shows that the company's revenue increased by 9.6% year-on-year to 1.031 billion US dollars, the net loss narrowed by 58.6% to 269 million US dollars, and EBITDA turned positive. This achievement is attributed to the global layout and expense control: Overseas business revenue increased by 84.7% year-on-year, the combined expenses of sales, management and research and development decreased by 217 million US dollars, and the expense ratio of the three decreased by 28.5 percentage points.

Among the core business segments, the coronary business generated revenue of 165 million US dollars in 2024, representing a year-on-year growth of 9.9%, with an overseas growth rate of 47%. In 2025, FireSorb's new products such as absorbable stents and shock wave therapy devices will be launched in large demand. Coupled with the medium-term guidance of the "Coronary Revival Plan" to achieve a revenue target of 2.5 billion yuan by 2026, it is expected that the revenue growth rate will increase to 15%-20%.

Surgical robots will generate revenue of 36 million US dollars in 2024, representing a year-on-year growth of 146%. Tumai has received 20 overseas orders. If overseas sales reach over 30 units by 2025, coupled with the issuance of domestic configuration certificates, the revenue growth rate may reach 100% to 120%, making it the first growth pole.

The EBITDA of the orthopedics department turned positive in 2024, with domestic revenue increasing by 26.1%. The domestic revenue of Heart Rhythm increased by 51%, and the overseas market stabilized. Under the cost control policy in 2025, it is expected that orthopedic revenue will increase by 10% to 15%, and heart rate revenue will increase by 15% to 20%.

In addition, the overseas market of Minimally invasive Medical services covers regions such as Europe, Latin America, and the Middle East. Among them, the market share of coronary stents in Turkey reaches 35%, and the growth rate in the Latin American market exceeds 46.5%. The surgical robot business, relying on the Tumai system, has been installed in markets such as the Middle East and Latin America, and plans to expand KOL cooperation through remote technology. In 2024, the proportion of the company's overseas revenue reached 35%, and it is expected to increase further in 2025.

03

Recent developments in Minimally invasive medicine

In addition to divesting non-core businesses and improving performance, Minimally invasive medical has many recent developments worth paying attention to. In terms of the globalization strategy, the company is still continuously promoting the expansion of overseas business. In 2024, the overseas business revenue of non-orthopedic and non-CRM subsidiaries exceeded 100 million US dollars, representing a year-on-year growth of 85%. The majority of this revenue came from coronary overseas business, accounting for approximately 50% of the 100 million US dollars.

The overseas market is divided into four major regions. In regions such as the Middle East, Latin America, Asia-Pacific, and Europe, Minimally Invasive Medical's coronary business has achieved remarkable results. For example, in Turkey, its market share reaches 35%. In 2025, overseas business is expected to maintain a high growth rate, with an estimated growth rate exceeding 80%. In addition, the sales of the surgical robot Tumai in overseas markets have also achieved a breakthrough. It has been on sale since 2024 and will continue to explore new markets this year, especially in the Middle East.

In the face of the risk that the United States may impose additional tariffs, Minimally Invasive Medical has also made thorough considerations. The company estimates that the impact of the tariffs will mainly be concentrated on the orthopedic business and CRM business in North America, with an estimated impact range of 3 to 4 million US dollars, which is generally controllable. When formulating the performance guidance, the company has taken the impact of tariffs into consideration.

To further enhance its performance, Microport Medical will continue to control its operating expenses in 2025. The goal is to further reduce by 40 to 60 million US dollars on the basis of a 200 million US dollar reduction last year, with the majority still in research and development expenses. Through project optimization and personnel collaboration, the R&D efficiency will be enhanced. Meanwhile, management expenses will also be further reduced through measures such as organizational downsizing.

Overall, Microport Medical is striving to achieve continuous improvement in performance and focused business development through a series of measures such as divesting non-core businesses, optimizing the cost structure, and promoting the globalization strategy. Despite facing many challenges such as changes in industry policies and market competition, its active adjustment is expected to bring new growth opportunities in the future. In this regard, Equipment Home will also continue to pay close attention and report on it.