{"text":[[{"start":6.6,"text":"This article only represents the author's own views."}],[{"start":10.6,"text":"Shanghai MicroPort MedBot (Group) Co. Ltd. (2252.HK) is cranking out milestones these days, as its laparoscopic robots rapidly gain traction after years of development. After achieving its first positive cash flow in the second half of last year, the company announced on Wednesday it will report its first-ever profit in the first half of 2026."}],[{"start":33.35,"text":"But rather than greet the news with enthusiasm, investors responded by dumping MedBot’s shares to the tune of a 3.4% decline on Thursday, the day after the announcement. The cold reception looks related to MedBot’s valuation, which is still quite high, even as the stock has lost about half of its value since its 2021 IPO."}],[{"start":54.650000000000006,"text":"We’ll return to that question shortly, and when and if the company’s financials might finally grow to catch up with its valuation metrics that are well ahead of global peers like Medtronic (MDT.US) and Stryker (SYK.US), which also focus on laparoscopic surgical devices. Such products perform surgery through insertion into tiny incisions using specialized cameras to guide surgeons."}],[{"start":79.25,"text":"Such methods are increasingly preferred because they are less invasive and painful for patients. And in a growing trend, the use of such robots allows surgery to be increasingly performed by doctors working remotely using high-speed telecoms connections."}],[{"start":92.75,"text":"Valuation multiples aside, MedBot’s story really does look quite remarkable – the result of years of R&D and marketing of its older SkyWalker line of orthopedic surgical robots, and its newer Toumai laparoscopic surgical robot that’s rapidly becoming its major breadwinner."}],[{"start":108.95,"text":"In one slight cause for concern, the company sharply curtailed its R&D spending by 30% last year, as the figure fell to 39% of revenue from more than 100% in 2024. That was part of a broader cost control campaign that paved the way for the company’s maiden profit in the first half of this year. But R&D is also the life blood of any company in such a high-tech and highly competitive space, and such a sharp slowdown, while fiscally positive, also suggests the company may be letting down its guard after years of hard work to get where it is."}],[{"start":142.9,"text":"That said, we’ll return to this week’s announcement, which saw MedBot announce it expects to report a net profit of between 28 million yuan ($4.14 million) and 40 million yuan for the first half of this year, reversing a 115 million yuan net loss a year earlier. The primary catalyst behind the move to the black was a huge jump in revenue, which rose between 200% and 230% in the six-month period from the 176 million MedBot reported in the first half of 2025."}],[{"start":177.85000000000002,"text":"That translates to first-half revenue of 519 million yuan to 579 million yuan. The growth rate marked a sharp acceleration from last year, when the company’s full-year revenue more than doubled to 551 million yuan from 257 million in 2024."}],[{"start":193.95000000000002,"text":"Soaring gross margin"}],[{"start":196.10000000000002,"text":"Besides the revenue growth, the other notable factor behind the move to the black was MedBot’s improving efficiency with its increasing scale. That helped it improve its gross margin by more than 15 percentage points in the latest six-month period from the 47% margin it reported in the first half of 2025. That figure was already up sharply from its 41% gross margin in the first half of 2024, showing it is rapidly gaining economies of scale."}],[{"start":224.25000000000003,"text":"And again, we should also reiterate the move to the black was assisted by the sharp slowdown in R&D spending."}],[{"start":230.85000000000002,"text":"The company’s Toumai laparoscopic robots have emerged as its star product, which it highlighted in another announcement last month. Among other things, it noted the product has received more than 300 commercial orders worldwide, accounting for more than three-quarters of the company’s nearly 400 units of its various products ordered to date. By comparison, MedBot’s second most popular product, the SkyWalker orthopedic robot, had logged just 65 units ordered as of March this year."}],[{"start":260.45000000000005,"text":"MedBot pointed out that Toumai’s first 100 orders took nearly 1,000 days to achieve, while the latest 100 took just 120 days. It said the product has achieved commercial installations in 60 markets globally, including 10 added this year, such as Saudi Arabia and South Korea."}],[{"start":279.75000000000006,"text":"Exports zoomed last year to easily overtake the company’s domestic sales. MedBot’s sales in China last year actually fell slightly to 151 million yuan from 154 million in 2024. But as a percentage of total sales, the figure plummeted to just 27% of sales from 60% in 2024. Exports moved the other way, quadrupling last year to 400 million yuan from 104 million yuan in 2024, accounting for 73% of sales last year."}],[{"start":312.75000000000006,"text":"All this shows that MedBot really is hitting its stride, which bodes well for the company if it can keep logging triple-digit revenue growth."}],[{"start":322.1000000000001,"text":"But from an investor perspective, the company’s stock still looks quite pricey even after a 13% decline this year, which includes the latest drop on Thursday. MedBot currently trades at a price-to-sales (P/S) multiple of 35, though that would drop by about half to 17 if it can maintain the 200% revenue growth through the rest of the year. Still, Medtronic and Stryker, which are both profitable, trade at far lower multiples of 2.9 and 4.8, respectively. Other less cutting-edge medical device makers like Venus Medtech (2500.HK) and Cofoe Medical (1187.HK) trade even lower at 1.5 and 1.8, respectively."}],[{"start":364.6000000000001,"text":"MedBot would need to keep up its current triple-digit revenue growth for the next few years to bring its P/S ratio down to levels similar to the global giants, which looks possible given its recent momentum, but certainly isn’t guaranteed."}],[{"start":378.00000000000006,"text":"The company points out it has strong policy support from the Chinese government, which is strongly promoting development of cutting-edge medical devices, including exports. But that could also come back to haunt the company if governments in key foreign markets decide that MedBot is receiving unfair state support, which is rapidly becoming a hot issue confronting China’s high-tech exports across a growing range of products."}],[{"start":409.35,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784891531_5856.mp3"}