Compumedics (ASX: CMP) has negotiated a new distribution agreements with three of the company’s long-standing distributors in China, for its sleep, neuro-diagnostic and monitoring systems.
The agreements are worth approximately A$15 million (US$11.3m) in minimum sales commitments over the next three years to the company.
In addition, a new A$1.5 million (US$1.1m) order has been received and will be shipped by 30 June 2018.
These new distribution agreements follow an announcement on 1 May 2018 that Compumedics’ Germany-based business, DWL, has received a new A$2.9 million sales commitment for the next 12 months, from its long-term distributor in China.
These announcements underpin Compumedics’ future growth in China, which has averaged approximately 20% pa over the last five years.
The agreements affirm Compumedics’ dominant position in China in the areas of sleep diagnostics, brain research and DWL‘s Trans-cranial Doppler (TCD).
More than 2,000 Compumedics systems have been installed at more than 600 hospitals and more than 333 universities across China. Seven of the top ten hospitals in China have Compumedics equipment.
Compumedics’ chairman and CEO, David Burton said that the sales commitments not only generate important new revenue for the company, but also confirm the importance of the Chinese market for Compumedics.
He also went onto say “with more than two decades of experience in China, Compumedics has over recent years enjoyed the benefits of this strategic investment in sales, marketing, technology and development, with an average 20% per annum growth over the last five years and we expect that this growth should continue in the double digits over the foreseeable future.”
“Compumedics has worked with its Chinese partners to build a foundation for future growth in one of the world’s most challenging and highest-growth markets. As a result, the Company is well positioned to capture continued growth in sleep diagnostics, as well as expanding further into neurological monitoring, a relatively new and untapped market in China and other parts of Asia.”
“We are proud that Compumedics systems are installed at seven of the top ten hospitals in China. We are the vendor of choice at many other leading hospitals in China. Compumedics will continue to use its position in China to not only grow these businesses but we will carve out a market position in neuro diagnostics over the coming years. Close to half our new sales commitments are for the supply of neuro diagnostic and monitoring equipment into China.”