Since the beginning of 2024, the-share market has seen another upsurge in repurchase holdings. Many listed companies are actively launching repurchase plans, demonstrating their firm confidence in corporate development.

On the evening of January 3, Weigao Orthopedics (688161.SH) issued an announcement stating that as of December 31, 2023, the company had repurchased approximately 920000 shares of the company through centralized bidding transactions, and the total amount of funds paid was RMB About 36.51 million yuan.

in the extension of mergers and acquisitions actively layout of non-collection routes, collection results better than market expectations and other multiple positive factors, the company's repurchase, not only effectively enhance the enthusiasm of the company's employees, but also further boost market confidence.

"Full production line, multi-brand" development, continuous optimization of business layout

Since its establishment in 2005, the company has been deeply engaged in the field of orthopedics and is the first batch of domestic manufacturers to enter the field of high-end orthopedic implant medical devices. In 2007, the company acquired Beijing Yahua and Jianli Bond, increased the joint product line, and effectively expanded the spine and trauma business, and further improved the product layout. The acquisition of Starfish Medical in 2017, its joint prosthesis is positioned in the high-end market, benchmarking the international advanced level. Today, the company has developed into one of the leading enterprises with complete product lines, leading scale and strong market competitiveness in China, with an operating income of more than 2 billion yuan in 2021.

In terms of channels, as of the first half of 2023, the company has established cooperative relationships with more than 2300 distributors, covering more than 4500 terminal medical institutions, and its business scope covers major regions of the country.

In the field of technology research and innovation, after years of exploration and development, Weigao Orthopedics has perfected the registration certificates of different brands of spine, trauma, joint and sports medicine production lines based on multi-brand advantages, and at the same time provides overall solutions for clinical practice in the field of sports medicine.

As a leader in orthopedic consumables, the company has actively opened up new areas of orthopedic treatment and explored the development of new orthopedic surgery, with more than 100 research projects progressing steadily. The R & D center has launched the layout construction of three R & D innovation transformation platforms in Shanghai (active equipment, emerging materials, electrical engineering, digital orthopedics), Wuhan (new materials, rehabilitation, etc.) and Weihai (existing product update iteration and basic R & D design). In 2022, the research and development cost will be 0.108 billion yuan, and the research and development cost rate will be 5.83, continuously improving the innovation ability and promoting the effective transformation of innovation achievements.

In addition to the continuous investment in research and development, in response to the industry background of high-value consumables collection, the company is continuing to actively lay out non-collection routes through extended mergers and acquisitions. In December 2022, Weigao Orthopaedics intends to purchase in cash a 100 percent stake in Shandong Weigao Xinsheng Medical held by Weigao Biotechnology, Weigao Fushen, Weigao Medical Imaging and Weigao Complete, with a transaction amount of 1.03 billion yuan. The acquisition is an important measure for the company to actively lay out new business. At the same time, the new medical tissue repair product line as the core, its two products can be applied to orthopedic surgery, and Weigao orthopedic original products to form synergies, the company's profitability is expected to further improve.

"price" has stabilized, "volume" is expected to continue to grow

Compared with the previous collection of heart stents and artificial joints, the collection of spinal consumables is much milder. It is understood that the current joint and spine national collection, covering 28 provinces and cities of the trauma class Beijing-Tianjin-Hebei "3 + N" and Henan 12 provinces of the alliance cooperation has been carried out, the possibility of a substantial price reduction in the future is expected to be low, the price has tended to be stable, the risk of collection is basically clear.

In addition, the latest round of centralized procurement rules bidding units are generally formed by multiple sets of conditions such as procurement demand, enterprise supply capacity, product materials, etc., and the probability of winning the bid will be effectively improved. Benefiting from this, domestic enterprises are expected to expand their market share and the localization rate will accelerate.

From the current localization rate of China's orthopaedic market, the technical level of medical equipment in the spine field is high, and the domestic start is late. Therefore, with the landing of orthopedic collection and the improvement of the competitiveness of domestic enterprises, there is still a large room for import substitution in the future for spine and joint products.

Weigao Orthopaedics, as a leader in the field of orthopaedic instruments in China, has significantly increased its market share after collection. In the spine collection, the company's bid-winning product volume accounted for 24%, ranking first in the market, all 18 products won the bid, the first year procurement demand of 127000 sets. Trauma field companies total collection of 266000 units, the market share further increased. The total demand of joint national mining companies is about 52000 units, accounting for 9% of the national collection demand.

In the future, with the normalization of collection, the aging of the population, the increase in the incidence of orthopedic diseases and surgical release, the overlay of leading enterprises continue to increase investment in research and development to enrich the product line layout, China's orthopedic implant market will continue to grow.

Guosen Securities stated that from an industry perspective, the current domestic orthopedic industry, especially spinal and joint surgery with degenerative diseases, has a low penetration rate, and the industry will maintain rapid growth in the future. Returning to the company level, Weigao Orthopaedics as the platform development of domestic orthopaedics leader, to achieve the spine, trauma, joint and sports medicine comprehensive coverage, the collection trend of the company quickly increase market share, consolidate the leading position.

Looking forward to the future, on the one hand, Weigao Orthopedics will increase research and development, enhance product competitiveness, accelerate iteration, and use diversified product lines to resist the risk of centralized procurement; on the other hand, it will continue to explore the layout of new materials, new fields, and new technologies. Gradually improve the upstream and downstream industry chain of orthopedics, open up new areas of orthopedics, and find new profit growth points.