2021 Rooe Med. Annual Report

Since the outbreak of the new epidemic, the medical device industry has received continued attention and has been one of the few industries to benefit from the downturn. In response to the spread of the epidemic, a variety of innovative medical devices have been developed, incorporating the latest technological advances. With the new epidemic as an opportunity, medical devices are enjoying a golden period of growth. Throughout the year, ROOE made the protection of all employees, customers and suppliers an absolute priority and mobilised production, was able to maintain close relationships with all customers and suppliers and gained significant market share, all thanks to the outstanding dedication of its employees. As a result, ROOE Medical's annual sales exceeded RMB 1,000W in its history.

Healthcare is inherently an anti-cyclical industry and it cannot simply be assumed that the impact of the epidemic will necessarily have a positive impact on the healthcare industry as a whole. The medical industry has been affected to varying degrees by the foreign monopoly of high-end products and the excessive competition of low-end products; the medical device industry is not a profitable industry, on the contrary, the industry has seen certain precursors to market saturation, such as vicious price wars for homogeneous products, and competition will become more intense in the future. Any blindly optimistic expectation of high profits and reckless actions that ignore the current state of the market will lead to failure.

Commenting on the annual results, Manager Doris of ROOE Medical said. "There are already too many similar and homogeneous products available in the market. The profit situation now is the lowest level in history since I have been in the industry, we can basically only make a profit by producing some high-end products, and ordinary products are at a loss."

Overall, there are many segments of medical devices and many types of products. This has led to the fact that although the overall market space is huge, the market segments are extremely vulnerable to touching the ceiling. The demand for high-end equipment preparation in hospitals is showing a saturation trend and the increase in demand for medical devices is slowing down. The epidemic has pushed up the demand for medical equipment in the short term, with sales revenue increasing year-on-year in the first quarter of 2021, benefiting medical companies that produce and sell products needed for the epidemic. However, overall in the second and third quarters, most sub-sectors of the medical device industry show a slight downward trend compared to the second quarter of the previous year, with medical device sales growth decreasing, but still maintaining a growth rate of around 10%.

For the medical device market, increasing ageing and longer life expectancy will have a positive impact on its growth. Emerging markets such as Asia Pacific and the Middle East are among the world's most promising markets, with medical device consumption far from saturated, and once market demand explodes, it will lead to multiples of growth. By geographic region, performance contrasts. In South Asia and North America, growth was impacted by the development of pandemics and public health initiatives, but ROOE Medical gained market share in many countries. In new markets, growth continued across all regions in the second half of the year. The performance of Australia, Singapore, Canada, New Zealand and Colombia was impressive and their contribution to the Group's results was significant. For the full year, despite the crisis, ROOE Medical maintained an operating margin of 10% and generated strong operating cash flow.

Driven by the strength of its strategic choices and determined momentum throughout the year, ROOE Medical adapted with speed and agility to this unprecedented environment and the terrible epidemic, accelerating all its transformations and going from strength to strength. Sales growth resumed in the second half of the year and accelerated by 20% in the fourth quarter, with net profit all trending upwards.

Looking back at the trajectory of our development and the many achievements of the year, we at ROOE Medical ushered in a new cycle of development under the development opportunities of market expansion, accelerated industry mergers and acquisitions, and the continuous emergence of independent innovations. It is expected that in the next few years, with the gradual advancement of standardization of smart medical care, new technologies and products will flood into the medical device industry, bringing fundamental changes to the traditional treatment model. In addition, as the "Internet+" spreads across the board, the importance of medical devices will also be further enhanced, and ROOE Medical Technology Co.