Genoray, the Korean originated manufacturer of medical x-ray imaging systems, published it’s latest quarterly results during November. These indicate that sales activity dramatically increased during the third quarter, propelling the business into growth again. The quarterly sales revenue reached ₩15.2 billion, compared with ₩11.8 billion in 2018, an increase of approximately +30% year-on-year. On a calendar year basis, this took cumulative sales to ₩42.8 billion, compared with ₩39.8 billion in 2018, an increase of approximately +8% year-on-year. While the third-quarter sales results were strong, overall growth during 2019 is significantly lower than previous years due to a weaker start to the year. Sales growth has averaged +18.5% per annum between FY 2014 and FY 2018.
Continued higher demand for mobile C-arm systems
The growth spurt during the third quarter was driven by a combination of continued revenue growth from the sale of interventional C-arm x-ray systems as well as a recovery in sales activity of computed tomography solutions. Revenue from the sale of C-arm systems is approximately +11.5% higher year-on-year driven by higher demand from both export and domestic markets. The company tends to perform well within its domestic market and according to the companies internal estimates, it has approximately 70% of the domestic market share of interventional C-arm x-ray systems. The company also has a growing international portfolio as it seeks to compete within maturer healthcare markets which are currently dominated by a few larger OEMs including GE Healthcare, Siemens Healthineers, Philips Healthcare and Ziehm Imaging GmbH. In order to remain competitive against the market leaders, the company has been broadening its product line-up through developing a range of C-arm systems with “value” and “premium” product specifications. The companies original portfolio of C-arm system were predicated upon image intensifier technology although has subsequently launched the OSCAR Prime and OSCAR 15 platforms which incorporates digital FPD technology for high-definition imaging. The OSCAR Prime platform acquired CE certification during June-17 and the OSCAR 15 platform secured U.S. FDA certification during February-18.
Weaker demand for digital x-ray for dental applications
The weakness in sales activity during the first half of 2019 was predominately due to lower demand for the companies dental x-ray systems for diagnosis, surgical treatment and treatment planning. Revenue from the sale of its PAPAYA series of products, which include panoramic, cephalometric and 3DCT x-ray systems, were significantly lower relative to the same period in 2018. During the first half of 2019, sales revenue from panoramic x-ray systems were approximately -17% lower year-on-year and approximately -20% lower for 3DCT devices. These systems are commonly used within an orthodontic setting at individual dental practitioners as well as SME hospitals or clinics with dental departments.
Sales results by geographic region
The company has historically performed well within its domestic market and is increasingly focused upon replicating this success within international export markets. The company currently operates internationally through three subsidiaries in the United States, Germany and Japan as well as approximately 40 global distribution partnership agreements. The companies international sales strategy appears to be focused upon securing contracts with the government as well as large hospital and clinic networks.
Investments in product development
The company is continuing to invest in product development, particularly within digital mammography and c-arm x-ray systems. This is expected to help enable further sales revenue growth and there are a number of research and development projects in the pipeline. This includes the development of a new interventional mobile c-arm system with high-speed CT and angiography capability, a new DBT mammography system as well as it’s own proprietary CMOS based x-ray detector. There appears to be a focus on implementing low dose technology and there are indications that these new solutions could enter into mass production in the coming periods. These research and development efforts have been supported by various national subsidies including financial support from the Ministry of Trade, Industry and Energy (MOTIE) as well as the Korea Evaluation Institute of Industrial Technology (KITECH).