SiNtx Technologies Inc (SINT)

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Weigao deal is worth more than 4pps alone.

Demand for orthopedic medical devices in China could rise faster than many had predicted, with the market set to become the largest in the world within a decade. More medical insurance coverage, better health care, rising incomes and even urbanization are all driving the increasing demand for orthopedic products.

Total revenue from medical devices in China in the first six months of 2015 hit ¥108 billion (US$16.72 billion), up 12.05 percent from the previous year. Profits were ¥9.24 billion (US$1.43 billion), up 4.71 percent on year, according to a recent report from China Industrial Information (CII), an industrial consulting services company. The rising star within this promising industry was orthopedic devices, which accounted for about 9 percent of the market.

According to an estimate in the report, titled "2016-2022 China Medical Device Market Analysis and Future Development Trend Forecast,” the Chinese orthopedic devices market will grow from ¥8.4 billion (US$1.3 billion) in 2014 to ¥26.5 billion (US$4.1 billion) in 2020, an annual rate of growth of around 14 percent.

Orthopedic supplies currently make up about 20 percent of all materials used in minor surgeries in Mainland China. They are the second most used type of devices behind general surgery supplies.

The first domestic orthopedic medical device companies in China appeared in the 1980s. In the last three decades they have grown in both numbers and size and now produce almost every type of orthopedic equipment. Some, like Shandong Weigao Orthopedic Device Company Ltd. and Shanghai Microport Orthopedics Co. Ltd., have emerged as top-notch producers with world-class products.

With one eye on the growth of the orthopedics space, many Chinese med-tech producers have rolled out plans to enter the space. Among them is China's largest device maker, Shenzhen-based Mindray Medical International Ltd. Last year, Mindray paid US$72.6 million for a remaining 49 percent stake in trauma, spine and joint device maker Wuhan Dragonbio Surgical Implant Co. Ltd.

"The growth of China's middle class and an aging but more affluent population helps the sector grow," said Neil Wang, global partner and Greater China president at Frost & Sullivan.

China has the largest elderly population in the world, with more than 200 million people over the age of 60, roughly 15 percent of the country's 1.4 billion people. Ten million more people join this group per year.

China is also the only country in the world with more than 100 million people over the age of 65, according to Frost & Sullivan, and the number will increase from 127 million in 2014 to 331 million by 2050.

China’s Market for Orthopedic Devices to See Explosive Growth


Growth of 14% per year for the med device companies. Its no wonder Weigao wants Si3n4 especially since the landscape is becoming more competitive. Its easy to see that Weigao is trying to maintain its as position as a top-tier producer

Not only does the Weigao deal come with minimum order of 425,000 units over 10 years, Weigao is also a future customer for Hip/Knee implants; increasing the total goodwill substantially for this 1 customer.