Bridges Medic Consulting

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1 Bridges Medic Consulting Unlike the United States, Chinese government and clinical societies do not track key statistics by industry/clinical sectors or regions in medical devices and applications. Bridges Medic Consulting can help companies get more accurate information through our primary, secondary research, a vast network of clinical and distribution resources to assist in your decision support and recommendations. Specifically: Which device sector to invest or avoid? Which device in the sector is or will have higher growth and share? how the companies/specific company are doing in the market? what is the product feedback relative to its competitors? which Chinese companies or investors may be interested in providing up-front investment in exchange for my know-how, technology, or distribution rights etc?. Below is a Chinese stent manufacturer high level report. Lepu medical market share is higher than that of the big U.S. multi-nationals like Medtronic, Boston Scientific, and St Jude etc. We also provide regional and sector reports. Please contact info@bridgesmedic.com for other examples. Sample Report of Lepu Medical Technology (Beijing) Co., Ltd. 1. Company Overview Lepu Medical is one of the key manufacturers of interventional cardiology products in China. Its revenue was RMB 920 million in FY History Lepu Medical was incorporated in Beijing in 1999 with registered capital of 12.6 RMB million. Luoyang Ship Material Research Institute provided cash of RMB 8.82 million while WP Medical Technologies, Inc. provided RMB 3.78 million with the form of patents. 1.2 Business 120 Liberty Street, North Andover, MA Phone: info@bridgesmedic.com

2 The business of Lepu Medical covers research and development of medical device and components, marketing its products, providing technical support and exporting of its products and importing technologies. 1.3 Shareholders Top 10 shareholders of Lepu Medical take more than 85% of its shares while the top 5 take more than 70%. Lepu Medical is mainly a state owned enterprise (SOE) as its top two shareholders are both big SOEs. WP Medical Technologies, Inc Mr. Pu Zhongjie Brook Investment Ltd. Technology & Investment Co., Ltd. of CSIC Luoyang Ship Material Research Institute 0.00% 5.00% 10.00%15.00%20.00%25.00%30.00%35.00% Luoyang Ship Material Research Institute It was founded in Luoyang city, Henan province in 1961 with registration capital of RMB 100 million. It is also the No. 725 Research Institute of China Shipbuilding Industry Cooperation (CSIC), which is a state owned enterprise under the management of China s State-Owned Assets Supervision and Administration Commission of State Council Brook Investment Ltd. WP Medical Technologies Inc. 1.4 Subsidiaries Shanghai Shape Memory Alloy Material Co., Ltd. It was founded in Shanghai in 1994 with registered capital of RMB 66 million. Mr. Pu Zhongjie is the legal representative and the company was wholly owned by Lepu Medical. It mainly manufactures a series of occlusion devices such as patent ductus arteriosus (PDA) occlusion device. It had reached sales of RMB 66.8 million with net profit of RMB 36.7 million in 2011.

3 Beijing Sida Medical Device Co., Ltd. Beijing Tiandi Hexie Technology Co., Ltd Finance Revenues of Lepu Medical Million RMB Revenues Total revenues of Lepu Medical increased from RMB 565 million in 2009 to RMB 920 million in 2011, showing a very strong growth. In 2011 sales of its medical products contributed near 90% of its total revenues, while the remained revenues are mainly from distribution of other medical products. Around 20% of its revenues were from top 5 clients in % of its revenues are from overseas business, while domestically sales in North China contributed above 30% of its total revenues. 2.2 Costs In 2011 the costs of sales and management took 16.2% and 9.8% of its total revenues respectively. Gross Profit of Lepu Medical Million RMB

4 R & D Lepu Medical had increased its R&D expenditure from 4.8% of total revenues in 2009 to 7.2% of total revenues in People 3.1 Board of Director Mr. Sun Jianke, Chairman Born in 1962, Mr. Sun is with Chinese nationality and did not have any overseas permanent residencies. He was assistant director and director of No. 725 Research

5 Institute of CSIC. Currently he is also chief engineer of CSIC and board of chairman of Tsingdao Shuangrui Ocean Environmental Engineering Co., Ltd. Mr. Pu Zhongjie, General Manager & CTO Born in 1963, Mr. Pu is with Chinese nationality and has the permanent residency of USA. He was senior engineer of Beijing Steel Research Institute and vice general manager of WP Medical Technologies Inc. Currently he is also the executive director of some subsidiaries such as Beijing Tiandi Hexie Technology Co., Ltd., Shanghai Shape Memory Alloy Material Co., Ltd. and Beijing Weifan Medical Technology Co., Ltd. Mr. Li Guoqiang Mr. Yang Fang Mr. Ma Yupu Management Mr. Pu Zhongjie, General Manager & CTO Born in 1963, Mr. Pu is with Chinese nationality and has the permanent residency of USA. He was senior engineer of Beijing Steel Research Institute and vice general manager of WP Medical Technologies Inc. Currently he is also the executive director of some subsidiaries such as Beijing Tiandi Hexie Technology Co., Ltd., Shanghai Shape Memory Alloy Material Co., Ltd. and Beijing Weifan Medical Technology Co., Ltd. Ms. Wang Yong, CFO Born in 1973, Ms. Wang is with Chinese nationality and did not have any overseas permanent residencies. She had worked for PWC in Beijing as a senior manager. Mr. Wei Zhanjiang 3.3 Employee There were total 1,311 employees in Lepu Medical by 2011, and 28.7% of them had university degree or above. Around 35% of its employees are for manufacturing while 20% for sales and marketing. Lepu Medical Employees

6 Other Management Technical Sales Manufacturing Operation With total revenues of RMB 920 million in 2011, Lepu Medical had achieved gross profit of RMB 537 million and net profit of RMB 473 million. It was mainly because of its focusing on construction of sales channels, actively merge and acquisition, and improving manufacturing and management. 4.1 Risk Analysis Price Decreasing According to China s public hospital reform plan, price management of interventional medical products will be deepened. Some provinces are planning to purchase interventional medical products via government bidding which will cause price decreasing Competitive Market There will be more players in the Chinese interventional medical products market and all players will compete with technology, sales channels, brand equity and more others Supervision R&D 4.2 Recent Activities Lepu Medical and its fully owned subsidiary, Beijing Tiandi Xiehe Co., Ltd., had set up a company called Coop in Netherlands. Through Coop, Lepu Medical had acquired 70% shares of Comed B.V. 4.3 Future Development

7 China s Ministry of Health had released a guideline in August 2011 and made it clear that the cardiovascular interventional surgeries will not only be conducted by third level hospitals, and more second level hospitals in tier 2 and tier 3 cities could also conduct the surgeries if they could meet some requirements. It means that there will be more hospitals that could be involved in cardiovascular interventional surgery and more products will be used. Lepu Medical will strengthen construction of its overseas sales channels and focus more on CE certifications Directory of Related Companies and Subsidiaries Presented with basic info such as phone number, website, and address etc.