Sat, Mar 22, 2014 - Page 13 News List

Cowealth expects to see 15 percent growth in revenue

By Camaron Kao  /  Staff reporter

Medical equipment supplier Cowealth Medical Holding Co (合富醫療) said yesterday that it expects its revenue this year to grow more than 15 percent from last year, in spite of losing sales rights in China of Accuray Inc’s Cyberknife system for treating cancer.

Accuray terminated the contract with Cowealth to sell the Cyberknife system in China in December last year, after Cowealth invested US$5 million in US-based ViewRay Inc to acquire one seat on its board and get the exclusive rights to sell ViewRay’s tumor treatment devices in Taiwan, Hong Kong and Macau, Cowealth said.

Sales of Cyberknife systems accounted for 20 percent of the company’s revenue of NT$2.58 billion (US$84.37 million) last year, down from 29 percent the previous year, company data showed.

SALES TO GROW

“Our sales in diagnostics facilities and reagents will grow higher than a year ago, offsetting the declining sales of the Cyberknife system,“ a Cowealth official, who declined to be named, said at an investors’ conference in Taipei.

The company expects sales of its diagnostics facilities and reagents to grow more than 30 percent this year from NT$2.06 billion last year, chairwoman Joyce Wang (王瓊芝) told investors.

Cowealth cooperated with 46 hospitals in China to provide customized package services in terms of diagnostics facilities and reagents in January, up from 30 hospitals the previous year, Wang said.

Although Cowealth is now in litigation with Accuray, Cowealth still booked sales of one Cyberknife system last month and it will report sales of about NT$100 million this year for repairing Cyberknife systems it sold in China, she said.

The Cyberknife system costs US$6 million.

As for sales of ViewRay’s system, Wang said potential clients for the system in Taiwan are about 70 hospitals, but the company does not expect to sell a system before the end of this year.

Treatments offered by ViewRay’s system are partially covered by the National Health Insurance program, making the system more likely to be accepted by hospitals, Wang said.

ViewRay’s system costs US$8.5 million, she said.

The company would acquire the sales rights to ViewRay’s system in China next year, after it solves the lawsuit with Accuray, she added.

ACQUISITION

Cowealth also announced that would acquire the 14-year sales rights to US-based TearScience Inc’s systems to diagnose and treat dry eye syndrome in China, Hong Kong, Taiwan and Macau.

Sales of TearScience Inc’s systems are expected to contribute tens of million of dollars to Cowealth’s revenue this year, Wang said.

The company forecast that demand for TearScience’s systems would likely be 550 units, or NT$2.5 billion, Wang said, adding that Cowealth would receive NT$2.5 million a year for maintaining each system.

Last year, Cowealth posted a profit of NT$273.01 million, or earnings per share of NT$5.1, up 61.79 percent from NT$168.74 million, or earnings per share of NT$3.81, the previous year, according to a company stock exchange filing.

The company’s board has agreed to pay a cash dividend of NT$3.8 this year, with a payout ratio of 69.09 percent. The payout ratio is lower than the 78.74 percent ration for last year’s dividend.

The cash dividend can be translated into the dividend yield of 3.04 percent based on the Cowealth shares closing price of NT$125 yesterday on the GRETAI Securities Market.

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