Thu, Jan 31, 2013 - Page 13 News List

Cowealth shares rise on debut amid promising outlook

UNTAPPED MARKET:China’s large, developing market should ensure continued growth for the Taiwanese supplier of medical equipment

By Camaron Kao  /  Staff reporter

Shares of Cowealth Medical Holding Co (合富集團), a medical equipment provider for Chinese hospitals, surged 34.8 percent to NT$86 on its first day of trading, as the company voiced optimism about development prospects in the Chinese medical market.

“The medical insurance policies implemented in China in 2010 will sustain growth in the medical market and lend support to our business,” Cowealth president and CEO Lee Duane (李惇) said at a ceremony marking the company’s debut on the GRETAI Securities Market.

Lee said Taiwan’s medical market grew for more than 10 years after the government introduced the National Health Insurance Program. Since China’s population is significantly larger than Taiwan’s, Lee expects stronger growth in the Chinese medical market.

Lee added that Chinese insurance policies stipulate that medical treatment should follow scientific standards set by the Chinese government for the insured to receive subsidies. This has created demand for advanced diagnostic facilities and reagents, which are Cowealth’s main products, Lee said.

Since the company provides long-term service packages for its diagnostic facilities and reagents, it has established long-term relationships with Chinese hospitals, creating a steady stream of revenue for the company. Cowealth says it counts 30 Chinese hospitals among its clients.

One of the products it sells is Accuray Inc’s CyberKnife System, a radiosurgery system used for treating tumors.

Cowealth said that in addition to the US$6 million it gets from the sale of each CyberKnife unit, it generates an extra US$2.5 million to US$3.5 million for providing system repair and upgrade.

The company has sold two CyberKnife Systems this year, and at least 16 hospitals in China will be equipped with the system by the end of this year, it said.

Cowealth posted a revenue of NT$2.24 billion (US$76.98 million) last year, up 34.58 percent from NT$1.66 billion a year ago, it said in a stock exchange filing.

Lee attributed the revenue growth to China’s expanding medical market. About 70 percent of its revenue last year came from sales of diagnostic facilities and reagents, while the remaining 30 percent came from sales of CyberKnife systems.

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