Align Sets Up Manufacturing Center in China, Grows in APAC
Align Technology ALGN, the clear aligner maker has taken a big step toward bagging the huge and growing dental market opportunities in densely populated emerging geographies. The company announced that it has recently inaugurated a new Invisalign treatment planning facility in Chengdu, China.
This new set-up represents Align’s first manufacturing operation base in China, in line with the company’s goal of geographic expansion and investment in high-potential Asia Pacific market. Earlier, this facility was performed within the U.S. at San Jose, Costa Rica.
Per the announcement, Align will now get treatment planning services for Invisalign providers in China from the Chengdu Treatment Planning and Training Centre of Excellence. This apart, the latest Invisalign treatment planning facility will help educating doctors across China. Also, transferring these services to China for the residents will increase the company’s manufacturing efficiency.
Prospects in Asia Pacific
Considering China as one of the key markets internationally and Asia Pacific being Align’s fastest growing region, the company’s latest decision is believed to be perfectly strategic.
Notably in China, this facility will provide treatment planning, clinical education and customer support. This will also enable Align to be geographically closer to its Asia Pacific customers, thereby further bolstering the existing business in the belt.
The company is quite optimistic about this consistent growth in these geographies and is looking forward to several other investments, already in pipeline.
Align’s international Invisalign volumes were significantly up 41.3% during the last reported first-quarter 2017. Per the company, this performance strongly banked on its solid Asia Pacific sales number. During the reported quarter in Asia Pacific, volumes were up 45.2% year over year led by China, Japan, Australia and New Zealand.
It is interesting to note that currently claims an impressive 30% share of total international teen cases performed. This market grew 31.6% year over year in the last-reported quarter. While this reflects a huge, growing demand worldwide, the company has high aspirations from Asia Pacific markets too.
The company also introduced its first clear aligner solution for teen Class II correction- the Invisalign Teen with mandibular advancement in certain country markets including the Asia Pacific zone.
These are indicative of Align’s growing popularity and its useful dental products in the widespread global market. This upside also bears its remarkable potential to enhance and meet the increasing demand in days to come.
Price performance
Over past three months, Align has outperformed the Zacks categorized Medical/Dental-Supplies industry with respect to share price movement. The company gained 45.7% in this period, compared to the broader industry’s 9.5% improvement.
We are upbeat about the strong Invisalign volume which in turn drove the top line in first quarter. While growth in North America and international regions was strong, higher-than-expected teenage cases across the globe have significantly contributed to the top line.
Zacks Rank & Other Key Picks
Align currently flaunts a Zacks Rank #1 (Strong Buy). Other stocks worth considering in the broader medical sector are Luminex Corporation LMNX, Inogen, Inc. INGN and Accelerate Diagnostics, Inc. AXDX. Notably, Luminex and Inogen sport a Zacks Rank #1, while Edwards Lifesciences carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock has roughly added 12.4% over the last three months.
Inogen has long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of roughly 82.0%.
Accelerate Diagnostics has a long-term expected earnings growth rate of 30.0%. The stock has added roughly 10.1% over the last three months.
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