LifeTech Announces 2016 Annual Results

Domestic Market Consolidation and Global Channel Expansion

Diversified Innovative Portfolio Promoted Sustainable Development

Steady Growth of Revenue and Significant Rise of Profitability

March 24, 2017, Hong Kong – LifeTech Scientific Corporation, the leading supplier of minimally invasive interventional medical devices for cardiovascular and peripheral vascular diseases and disorders ("LifeTech" or "The Company") and its subsidiaries ("The Group") announced its audited comprehensive performance as of December 31, 2016 (“The Reporting Period).

Annual Performance 

Revenue of the Group was approximately RMB352.8 million for the year ended 31 December 2016, representing a growth of approximately 13.2%. Gross profit was approximately RMB276.5 million for the year 2016, representing a growth of approximately 9.5%. Operating profit was approximately RMB108.3 million for the year ended 31 December 2016, representing an increase of approximately 14.6%. Net profit attributable to owners of the Company for the year ended 31 December 2016 was approximately RMB145.7 million as compared to the net profit amounting to approximately RMB2.4 million in 2015. Considering that the fair value and net exchange losses of convertible notes are non-operating and non-cash flow items, excluding the influence arised therefrom, the Company would have recorded a net profit attributable to owners of the Company of approximately RMB256.1million for 2016.

Business Development

Despite of the challenges of the uncertain global economic environment, the Group was able to achieve solid results for core businesses. The Group currently has distributors in numerous countries across Asia, Africa, North America, South America and Europe, with sales network spreading all over the world. During the Reporting Period, the Group has improved its international image by participating in a number of domestic and overseas exhibitions, academic exchanges, trainings and etc. The sales force and market penetration has been strengthened. However, China is still the largest market of LifeTech, and sales generated from the China market accounted for approximately 80.4% of the total revenue for the year ended 31 December 2016, representing an increase of 18.5% as compared to the corresponding period in 2015, indicating the stronger brand image and greater market share in China. Our international markets recorded approximately a 4.3% decrease in sales for the year ended 31 December 2016 as compared to the corresponding period in 2015, which was mainly due to we terminated the exclusive distribution rights of Medtronic for CeraFlex TM occluders in selected countries in Europe and the Middle East.

With the expansion of product range, the Group currently has three main product lines, including structural heart diseases business, peripheral vascular diseases business and cardiac pacing and electrophysiology business. The turnover contributed by the peripheral vascular diseases business for the year ended 31 December 2016 was approximately RMB228.4 million, representing a significant growth of approximately 35.1% while the turnover contributed by the structural heart diseases business for the year ended 31 December 2016 was approximately RMB124.5 million. The newly launched LAmbre™ LAA occluder in the European market after obtaining the CE certification in June 2016 generated sales approximately RMB3.2 million for the year ended 31 December 2016. Currently, the new product from cardiac pacing and electrophysiology business has not yet been launched in the market.

Remarkable achievements made in R&D

In 2016 we have made the following achievements in R&D field:

‧ GoldenFlow™ peripheral stent was granted with the CE certification in Europe.

‧ LAmbre™ LAA occluder system was granted with the CE certification approval in Europe.

‧ The SteerHD™ delivery sheath has obtained its registration certificate in China.

‧ The FemFlow™ DEB, the HeartTone™ pacemaker and the IrisFIT™ PFO occluder have been approved as innovative medical devices.

‧ Lliac Bifurcation Stent Graft System was still at the stage of clinical trial.

Pacemaker Project progressed smoothly

In 2016, we have been continuously making good progress in our pacemaker project. The pacemaker product line has met the manufacturing qualification requirements with the support from Medtronic. In August 2016, the HeartTone™ pacemaker was approved as an innovative medical device by the CFDA and the animal study was completed in January 2017.

Highly Recognized by Capital Market

LifeTech was awarded the “Best scientific and technological innovation listed company” in the sixth China Securities Golden Bauhinia Award. This award gives a high-level recognition of the innovation ability, scientific research ability and technology leading position as well as a recognition of the past performance, corporate governance and development prospects in the international capital market. 

Global Academic and Marketing Activity

In 2016, we continuously expanded sales network coverage and strengthened market penetration by expanding our academic and market promotion activities. Below are marketing activities highlights of 2016:

▶ In March 2016, Pediatric and Adult Interventional Cardiac Symposium (“PICS-AICS”) and Catheter Interventions in Congenital, Structural and Valvular Heart Disease (“CSI”) jointly organized the conference named “PICS CSI Asia 2016” in Dubai, UAE. LifeTech was invited to attend the conference as one of major sponsors. In the conference, LifeTech held a symposium with the topic of “Congenital Heart Disease Occlusion Experiences Sharing and Discussion”, and invited famous experts in the field to share their practice in applying congenital heart disease treatment devices and clinical trial experience of our products. ‧

▶ In April 2016, LifeTech cooperated with experts on congenital cardiovascular diseases from the People’s Hospital of Tibet Autonomous Region and West China Second University Hospital of Sichuan University, to perform voluntary screening of congenital heart diseases on children in Naqu County, Tibet. During the activity, the team had performed the screening on more than 3,600 children, completed more than 320 ultrasonic tests and diagnosed 45 patients with congenital heart diseases. 

▶ In 2016, as a leading enterprise in cardiovascular minimally invasive interventional medical device field, LifeTech was invited to a number of international forums such as, the 7th Asia Pacific Congenital and Structural Heart Intervention Symposium 2016 (“APCASH”) held in Hong Kong, Global Left Atrial Appendage Occlusion Summit 2016 held in Leipzig Germany, Transcatheter Cardiovascular Therapeutics“TCT2016” held in Washington and LAA CSI Focus 2016 held in Frankfurt, Germany to show the outstanding product design characteristics and the clinical application of excellent performance of our innovative products.

▶ In November 2016, the 9 th China Endovascular Conference (“CEC 2016”) was held in Beijing. LifeTech held many academic activities during the conference, showed the innovation strength in cardiovascular interventional treatment cavity field and product superiority according the high-end academic platform. 

▶ Lifetech Knowledge Exchange Program (“LKEP”) continued to promote the spread of cutting-edge science in minimally invasive surgery with cardiovascular intervention aiming to improve the treatment skills of the doctors and thereby to allow more patients to receive safer and more effective treatment. As at 31 December 2016, LifeTech held 37 LKEP academic exchange programs in China, Greece, Turkey, Russia, Kazakhstan, Indonesia, Thailand and other countries, involving over 200 experts from different countries. 

Prospects

The Group will continue to strive increasing the revenue in future by relying on its two core businesses, namely structural heart diseases business and peripheral vascular diseases business. We also believe that the revolutionary LAmbre™ LAA occluder will strengthen our leading position in the field of structural heart diseases business, and the product`s innovative medical device status approved by CFDA will help accelerating its domestic registration procedure. In addition to that, LifeTech had already completed the localized high quality pacemaker production lines with assistance from Medtronic, which would help us to enter into a huge domestic market of pacemakers. Furthermore, the Group will further develop and improve the performance and manufacturing craft of our existing products, as well as integrate of domestic and overseas market resources to expand global sales channel and market share.

With the management team’s vision and mission and the efforts of loyal employees, the management of the Group is confident that we are competent to meet the challenges and to grasp the opportunities in the forthcoming years. We are well equipped and are ready to mark another milestone.