Live Performance Conference | Achieve profitability by 2025, MicroPort Medical Management: The main development focus is overseas expansion

Recently, the annual results report for fiscal year 2025 disclosed by MicroPort Medical (HK00853, share price HKD 9.17, market cap HKD 17.581 billion) shows that in 2025, the company achieved revenue of $1.105 billion, a year-on-year increase of 6.0% (excluding the impact of exchange rates). Gross profit was $635 million, up 10.5%. Adjusted operating profit increased significantly to $0.33 million (loss of $123 million in the same period last year). Profit for the year was $38.43 million (loss of $268 million in the same period last year), achieving a turnaround to profitability.

Recently, MicroPort Medical held a 2025 annual results earnings call (hereinafter referred to as the earnings call). At the earnings call, the company’s management provided explanations on market concerns such as its 2026 profitability targets, R&D investment, responses to the centralized procurement of medicines (volume-based procurement), overseas expansion, and its brain-computer interface (BCI) layout, clarifying its operational focus and medium- to long-term development plan.

MicroPort Medical’s management stated that at present, the company’s main focus and actions are concentrated in overseas markets; currently, among its more than 300 products, fewer than 50 have been shipped overseas.

Orthopedics revenue declines

According to publicly available information, MicroPort Medical was founded in 1998 and is headquartered in Shanghai Zhangjiang Science City. Its business includes comprehensive cardiovascular treatment and imaging, comprehensive heart failure management and electrophysiology, major vessel peripheral and oncology interventional procedures, life support for critically ill and urgent patients, brain science and sensory brain-computer interfaces, and joint spine trauma, sports medicine, and more. The company has multiple listed subsidiaries, including MicroPort XinTong, MicroPort Electrophysiology, MicroPort Cardiopulmonary, MicroPort Brain Science, and MicroPort Robotics, among others.

The company’s financial reports show that in 2025, MicroPort Medical’s operating revenue was $1.105 billion, up 6.0% year over year (excluding the impact of exchange rates). Gross profit was $635 million, up 10.5%; due to supply chain integration and process optimization, the gross margin rose to 57.4%. Net cash inflow from operating activities was $69.13 million, achieving a turnaround from negative to positive.

However, according to reporters from the Economic Daily News, concerns have been raised regarding the quality of MicroPort Medical’s profitability in 2025.

The financial reports indicate that in 2025, MicroPort Medical’s continuing operations recorded a loss of $256 million. The discontinued operations, mainly MicroPort Brain Science, contributed profit of $294 million, which is what turned the overall net profit positive. Of this, gains of $277 million were recognized from selling part of its equity interests in MicroPort Brain Science.

As for the balance sheet, the company’s financial report shows that by the end of 2025, MicroPort Medical’s total borrowings were $1.549 billion and the asset-liability ratio was 59.4%. Of this, bank loans due within one year were $414 million. Meanwhile, the convertible bonds of $216 million that need to be redeemed by the end of 2026, together with $750 million in debt related to earnings financial covenants: in the first half of 2026, net profit must be no less than $45 million, and for the full year no less than $90 million. If the targets are not met, early repayment of the debt will be triggered, and liquidity pressure will rise sharply.

At the earnings exchange meeting, when asked about the aforementioned “bet” pressure, MicroPort Medical’s management admitted, “We can’t provide net profit guidance, but we do have financial constraints. For the full year of $90 million, we should aim to complete that target.”

At the same time, MicroPort Medical’s management expects that the company’s operating profit margin target will be raised to around 4%, and operating cash flow will remain positive growth. Financial costs will decline by about $60 million year over year. The scale of asset impairment will be significantly reduced, and gains from strategic asset disposals are expected to be no less than $100 million.

In addition, the orthopedics business that the market holds high expectations for at MicroPort Medical achieved revenue of $235 million in 2025, a year-on-year decrease of 7.5% (excluding the impact of exchange rates).

In response, MicroPort Medical’s management said that the challenges the company faces in its orthopedics business are not due to a single supply chain issue, but rather a combination of multiple factors, including overall management, product mix, and market execution. The company has formulated targeted solutions to address these issues.

“Betting” on overseas markets

It is worth noting that in 2025, overseas business became a major highlight of MicroPort Medical’s development.

The financial report shows that in 2025, after excluding the impact of exchange rates, the revenue from MicroPort Medical’s “GlobalPass” commercialization platform grew 78.8% year over year to $164 million, achieving breakeven for the first time.

In addition, the high growth in overseas markets mainly came from breakthroughs in MicroPort Medical’s innovative business. The financial report shows that during the reporting period, the overseas sales of MicroPort Medical’s surgical robots and structural heart disease businesses, after excluding the impact of exchange rates, surged 286.6% and 255.0%, respectively, becoming core highlights driving overall revenue growth.

At the earnings call, MicroPort Medical’s management said it will place global expansion at the strategic core of the company.

MicroPort Medical’s management also pointed out that the main line of future development will be overseas expansion. Currently, the scale of the company’s overseas business has reached between $250 million and $300 million. This achievement relies only on fewer than 50 products among its more than 300 products being promoted in a very small number of regions. The vast majority of markets worldwide are still in a stage awaiting development, and the overall 12 regions are still at an initial stage.

MicroPort Medical’s management further stated that currently, the company has an overseas team of about 150 people, and plans to expand this to around 300 people in 2026. In the long run, the company will build a globalized overseas team with the scale of several thousand people. The company also emphasized that its overseas business has shown a growth trend with high double-digit to low triple-digit figures, but it has not yet truly begun large-scale efforts; the future growth space is broad.

However, some industry analysts noted that overseas expansion faces risks such as geopolitical factors, market access, and intensifying competition. The return on R&D investment period is long, and uncertainty is relatively high.

Economic Daily News