Modern Dental Group Limited
Modern Dental Group Announces 2023 Annual Results – Record High Revenue, EBITDA and Net Profit, Number of Cases Surpassing 2 Million

Modern Dental Group Announces 2023 Annual Results – Record High Revenue, EBITDA and Net Profit, Number of Cases Surpassing 2 Million

RESULTS HIGHLIGHTS:

• For the year ended 31 December 2023, the Group’s revenue was approximately HK$3,172.0 million, representing an increase of approximately 12.1% YoY; the gross profit for the year was approximately HK$1,700.7 million, representing an increase of approximately 22.9% YoY; the gross profit margin was approximately 53.6%; the Group’s EBITDA was approximately HK$694.5 million, representing an increase of approximately 49.9% YoY; the net profit was approximately HK$402.2 million, representing an increase of 82.4% YoY.
• For the year ended 31 December 2023, the Group’s digital solution cases that are produced from its Mainland China production increased to approximately 857,064 cases reflecting an increase of 55.9% as compared with the same period in 2022 as a result of our clients’ increased adoption of intra-oral scanners.
• Basic earnings per share for the year ended 31 December 2023 amounted to HK42.4 cents, representing an increase of approximately 83.5% compared with the same period last year.
• The Board recommended a final dividend of HK9.0 cents per ordinary share for the year ended 31 December 2023.

(26 March 2023, Hong Kong) Modern Dental Group Limited (“Modern Dental” or “the Group”, stock code: 03600.HK), a leading global dental prosthetic device provider, announces its annual results for the year ended December 31, 2023 (“the year”).

In 2023, the Group was in a position to announce record sales and profit figures due to a continued and steady increase in demand for its products from its existing, returning and new customers. The Group’s multi-dimensional strategies and comprehensive products portfolio, encompassing higher-priced dental treatments and cost-effective dental treatments, enabled the Group to capitalize on market opportunities by capturing new customers and increase its sales volume, and in each case displaying the Group’s ability to outperform its competitors throughout the economic cycle.

The global digitalization trend continues to accelerate the consolidation of the dental prosthetics industry, allowing the Group to further increase its market share in the industry and our continued digital transformation is expected to improve our customers’ and patients’ experiences, further allowing the Group to differentiate itself from its competitors and outperform the industry peers. The consolidation trend of the dental prosthetics industry is clearly continuing, and with the addition of our Vietnam production facility and Dongguan Phase 2 production facility – the Group has the optionality to further improve its market positioning and protect its margins.

European Businesses

The revenue generated from sales in the European markets accounted for the largest portion of our revenue for the year ended 31 December 2023. During the year, the European market recorded a revenue of approximately HK$1,399.4 million, increased by approximately 18.5% as compared with the same period last year and accounted for 44.1% of the Group’s total revenue. The increase of revenue from the European market was attributable to the increase in sales order volume driven by the launch of new products, such as digital dentures, and our state-of-the-art digital workflows.

The Group has been the frontrunner to provide comprehensive digital solutions offerings, ranging from numerous minimal invasive and aesthetic prosthetic solutions to intra-oral scanners and clear aligners, and is well positioned to capture the opportunities arising from the accelerated digitalization trend of the dental industry. The Group continues to aggressively gain market share from international and domestic competitors through our established dental ecosystem solutions with a focus on education and digitalization, which is available within close proximity to our clients; effectively meeting our clients’ high expectations through our various onshore and offshore resources. The Group is committed and will continue to equip ourselves to provide the state-of-the-art digital solutions offering to the dental community in the market.

North American Businesses

The revenue generated from sales in the North American market, including the United States and Canada, represented the second largest portion of our revenue for the year ended 31 December 2023. During the year, the North American market recorded a revenue of approximately HK$753.6 million, increased by approximately 6.2% as compared with the same period last year and accounted for approximately 23.8% of the Group’s total revenue.

Our clients’ interest surrounding digital dentistry continued to increase during the period. With our centralized digital workflows and network oversight over our wide coverage of production units within the region, we are well positioned to support the customers’ needs through their digitalization journey, focusing on leveraging efficiencies and providing an enhanced customer experience throughout the network. Looking forward, the Group targets to utilize the newly set up Vietnam production facility to establish a new business unit specialized in serving mid/large scale dental clinic chains customers in the North American market.

Greater China Businesses

Our Greater China market comprises Mainland China, Hong Kong and Macau. The revenue generated from sales in the Greater China market accounted for the third largest portion of our revenue for the year ended 31 December 2023. During the year, the Greater China market recorded a revenue of approximately HK$713.6 million, increased by approximately 7.0% as compared with the same period last year and accounted for approximately 22.5% of the Group’s total revenue. The increase of revenue from the Greater China market was largely attributable to the increase in sales orders volumes driven by the digitalization trend and the re-opening of Mainland China since late 2022.

The Group is optimistic in its mid/long-term outlook for this market in particular where the latest procurement-related government measures are expected to (i) standardise the pricing of dental prosthetics and develop price transparency, which would level the playing field; (ii) allow the Group’s leading brand name and reputation to be a key consideration for its client and customer; and (iii) have the Group benefit from its large production team and its ability to allocate resources efficiently according to the customer or client. Our substantial market share of government-related orders in Hong Kong gives us confidence and highlights the Group’s competitive advantages in gaining market share under a centralized procurement system – due to our competitive strength in products quality, advance in product offering and financial resources.

Australian Businesses

For the year ended 31 December 2023, the Australian market recorded a revenue of approximately HK$254.3 million, increased by approximately 7.9% as compared with the same period last year and accounted for approximately 8.0% of the Group’s total revenue. The increase of revenue from the Australian market was largely attributable to the increase in sales order volume. Through our various brands, which offer onshore-and offshore-made products, at multiple price points ranging from economy and standard to premium/boutique, the Group is able to effectively penetrate the entire Australian market.

Others

Other markets primarily include Indian Ocean countries, Malaysia, Taiwan, Singapore and Thailand. For the year ended 31 December 2023, these markets recorded a revenue of approximately HK$51.1 million, increased by approximately 35.6% as compared with the same period last year and accounted for approximately 1.6% of the Group’s total revenue. The increase of revenue from the other markets was largely attributable to an increase in sales order volume and a rise in the selling price in 2023. The increase can be attributed to the ongoing economic recovery after post COVID-19 period.

Future Prospects

It is expected that the Group continues to consolidate the dental prosthetic market, and the Board is of the view that the consolidation trend is irreversible and clearly continuing. Therefore, notwithstanding any short or medium term challenges the global economy may face, the Board is confident that the Group is expected to outperform its competitors and continued to thrive. It is the Group’s ability to thrive during such uncertain economic conditions that give the Board comfort in its optimistic view of the Group.

The medium and long-term global demand for dental prosthetics is expected to continue due to key irreversible demographic factors and trends. Going forward, the Group aims to reinforce its worldwide leading position through opportunistic transactions including strategic co-operations, acquisitions, joint ventures and/or partnerships, to further expand and complement our product-offering (in particular, our clear aligner products), distribution and sales networks which will in turn, drive our business expansion. The Group continues to grow into more than just a one-stop shop dental prosthetic provider, but a full dental ecosystem to support our customers. The Group’s investment in Dongguan phase 2 and Vietnam production facilities are expected to provide the Group with greater production solutions and optionality which will in turn, increase the Group’s level of research and development in further enhancing our production and products.

Looking forward to 2024, with the Board’s extensive experience and determination to meet any short-term challenges, the Group is in an ideal position to take full advantage of, and will remain opportunistic in, any business opportunities whilst remaining cautious and prudent in safeguarding shareholders’ interests.

About Modern Dental Group 
 

Modern Dental Group Limited (Stock code: 03600.HK) is a leading global dental prosthetics provider, distributor and consultant with a focus on providing custom-made prostheses to customers in the growing prosthetics industry. Our product portfolio is broadly categorized into three product lines: fixed prosthetic devices, such as crowns and bridges; removable prosthetic devices, such as removable dentures; and other devices, such as orthodontic devices, sports guards, clear aligners, and anti-snoring devices.

Modern Dental Group has a global portfolio of respected brands, including Labocast, Permadental and Elysee Dental in Western Europe, YZJ Dental in China, Modern Dental Lab in Hong Kong, Modern Dental USA in the United States, Modern Dental Pacific in Australia and New Zealand, Modern Dental SG in Singapore, Modern Dental TW in Taiwan, and Apex Digital Dental in Malaysia. We have grown these brands by providing premium and consistent quality products and superior customer service. We have more than 80 service centers in over 23 countries and serve over 30,000 customers.