The board (the “Board”) of directors (the “Directors”) of China Medical System Holdings Limited (the “Company”, together with its subsidiaries, the “Group”) is pleased to announce that on 14 December 2021, the Group through a subsidiary of the Company – a dermatology medical aesthetic company (“CMS Aesthetics”) signed an Exclusive Collaboration Agreement (the “Collaboration Agreement”) with OVMEDI Co., LTD. (“OVMEDI”), a medical aesthetic specialty company of South Korea, for Omega VL polydioxanone (PDO) embedding thread (the “Thread Carving Product” or the “Product”).
In accordance with the Collaboration Agreement, the Group through CMS Aesthetics gained an exclusive right to market, sell, distribute and commercialize the Thread Carving Product in Mainland China, Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan (the “Territory”). The Collaboration Agreement will commence on the effective date of the Collaboration Agreement and continue to be valid for a period of thirteen years. Upon the expiration of the aforementioned term, the Collaboration Agreement may automatically be renewable for every single period of one year thereafter as per certain conditions agreed in the Collaboration Agreement.
INFORMATION ABOUT THE PRODUCT
The Thread Carving Product is made of PDO and is used for facial and body thread embedding with the effects of lifting and firming. The brand of the Thread Carving Product is one of the top three well-known brands in South Korea. The raw materials are from well-known international manufacturers and have high quality and excellent workmanship. The Thread Carving Product has complete specifications including smooth line, serrated line (small V line) and anchorage line (large V line) and irregular specifications. The Product has been approved in the United States and South Korea for many years with certain awareness and good reputation. Medical aesthetic physicians in Hong Kong and Taiwan are familiar with the Product.
Thread embedding is also called “thread carving” (among which the facial thread embedding is also called “V face lifting”). Threads are embedded in the dermis and other parts to stimulate collagen regeneration, realize the lifting, fixing and resetting of the tissue, and therefore achieve the effect of reducing wrinkles and sagging. The time of embedding operation is short and the recovery is fast. PDO has high biocompatibility and is 100% degradable.
The market of thread embedding is increasing rapidly. According to analysis of Frost & Sullivan, the market size of thread embedding products in Mainland China reached approximately RMB1 billion in the year of 2019, and it is expected to reach RMB3.2 billion in the year of 2024, with a compound annual growth rate (CAGR) of 26% from year 2019 to 2024.
INFORMATION ABOUT OVMEDI
OVMEDI integrates R&D and production to provide innovative medical aesthetic devices, functional medical aesthetic raw material products and medical aesthetic solutions. OVMEDI has a comparatively high awareness among the embedding thread brands in South Korea.
REASONS FOR AND BENEFITS OF ENTERING INTO THE COLLABORATION AGREEMENT
This collaboration consists with the Group’s strategy to continuously expand into the medical aesthetic field and develop the medical aesthetic business. The introduction of Thread Carving Product fills the blank of embedding thread product, enriches the Group’s product matrix in the medical aesthetic field and makes the matrix more multi-dimensional. The Thread Carving Product has complete specifications, enabling the physicians to design body parts specified solutions which are easy to operate depending on the degree of sagging and achieve the best effect. Meanwhile, combined with the other medical aesthetic products of the Group, the Product can satisfy the seeking of youth and beauty of the beauty-loving people in China.
This collaboration with the first-tier medical aesthetic products manufacturing enterprise of South Korea will further consolidate and enhance the Group’s comprehensive competitiveness and market awareness, promoting CMS Aesthetics into a leading dermatology, medical aesthetic and health management company in China.