The current slump in China’s economy is hurting multiple sectors everywhere, from big technology companies to manufacturing firms. Dental equipment firms have been hit now as well.
Align Technology, who is the maker of Invisalign braces, a popular brand, issued profit warnings on Wednesday night after it released its latest earnings and sales figures. Align which is based out of San Jose in California, stated that a slow demand in the Chinese region was responsible for this weak forecast.
Align’s CEO Hogan stated that the current trade ambiguity in China had caused them to take a cautious view regarding their growth in Asia Pacific locations for Q3.
Align shares fell by over 25% when this news broke out, which made this company the worst performing share listed in S&P 500 this year.
While Align has shipper fewer products that it hoped for, Hogan stated that the firm still viewed China to be a huge market opportunity. Over 40% of all 2000 doctors that the firm trained in China during the last quarter happened to be located in China, he stated.
Although the current market sentiment wasn’t in their favor, Hogan stated that he was optimistic about the company’s long-term prospects in China. Align was still making more moves in the expectation that business would pick up in China.
Hogan said the firm would be investing further in Asian training and manufacturing centers, ensuring they were operating similar to local companies. More expansion would be done in small Chinese cities, with additional investments being poured into a dentist sales team in Chian to promote the Invisalign Go aligners. Digital and TV ad spending would be increased as well, he stated.
However, at the current moment, Chinese customers aren’t buying enough Align products, which is causing apprehension among Wall Street investors.