HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>After 23H1 results were released, we have seen some positive business progress in internationalization. There has been no obvious negative news about performance. Acotec's future prospects are still relatively optimistic.</li>
<li>Contrary to solid fundamentals, Acotec's stock price continues to decline. The sluggish stock price performance is not directly related to fundamentals, but rather to poor liquidity and unsatisfactory capital inflows.</li>
<li>Stock price hasn’t bottomed yet, so investors're not advised to rush to buy the dip.For market value management, Acotec's management need to invest more energy/time to maximize shareholder value/investors’ returns.</li>
</ul>


After 23H1 results were released, we have seen some positive business progress in internationalization. There has been no obvious negative news about performance. Acotec's future prospects are still relatively optimistic.
Contrary to solid fundamentals, Acotec's stock price continues to decline. The sluggish stock price performance is not directly related to fundamentals, but rather to poor liquidity and unsatisfactory capital inflows.
Stock price hasn’t bottomed yet, so investors're not advised to rush to buy the dip.For market value management, Acotec's management need to invest more energy/time to maximize shareholder value/investors’ returns.


Acotec Scientific Holdings (6669.HK) - The Fall in Share Price Is Not over Yet

<ul>
<li>Acotec’s revenue streams became more diversified in 23H1. New product launch in the next 1-2 years would further relieve the dependence on DCB products, leading to healthier revenue structure.</li>
<li>Acotec disclosed details of its collaboration with Boston Scientific.If the caps are fully implemented, revenue growth of Acotec will be impressive. Acotec has the ability to resist centralized procurement risks.</li>
<li>Concerns include how much negative impact anti-corruption campaign will have on Acotec’s performance in 23H2, and to what extent the deal with Boston Scientific would be implemented?</li>
</ul>


Acotec’s revenue streams became more diversified in 23H1. New product launch in the next 1-2 years would further relieve the dependence on DCB products, leading to healthier revenue structure.
Acotec disclosed details of its collaboration with Boston Scientific.If the caps are fully implemented, revenue growth of Acotec will be impressive. Acotec has the ability to resist centralized procurement risks.
Concerns include how much negative impact anti-corruption campaign will have on Acotec’s performance in 23H2, and to what extent the deal with Boston Scientific would be implemented?


Acotec Scientific (6669.HK) - Growth Is Expected to Continue, But Risks Behind Can't Be Ignored

Shenzhen Mindray Bio-Medical Electronics / Equity Bottom-Up

Shenzhen Mindray Bio-Medical Electronics (300760 CH)

<ul>
<li>Mindray's 23H1 results were in line with expectations. The high growth in Q2 has given us more confidence in the “complementarity of performance” between different business lines of the company.</li>
<li>Mindray is right to acquire DiaSys,but Mindray should disclose the impact of M&amp;A on financial statements.When investors understand how to "quantify" M&amp;As, positive news would be reflected in stock price.</li>
<li>The anti-corruption campaign and foreign capital outflows have weighed on Mindray’s share prices. Based on our analysis, the decline offers a good buying opportunity and share price will rebound afterwards.</li>
</ul>


Mindray's 23H1 results were in line with expectations. The high growth in Q2 has given us more confidence in the “complementarity of performance” between different business lines of the company.
Mindray is right to acquire DiaSys,but Mindray should disclose the impact of M&amp;A on financial statements.When investors understand how to "quantify" M&amp;As, positive news would be reflected in stock price.
The anti-corruption campaign and foreign capital outflows have weighed on Mindray’s share prices. Based on our analysis, the decline offers a good buying opportunity and share price will rebound afterwards.


Shenzhen Mindray Bio-Medical Electronics (300760.CH) - Some Points Worth the Attention

Zylox-Tonbridge Medical Technology / Equity Bottom-Up

Zylox-Tonbridge Medical Technology (2190 HK)

<ul>
<li>The Beijing Medical Insurance Bureau issued a notice soliciting opinions on the linkage program of DRG payment and VBP policy in the city, involving sports medicine, neuro-intervention, and electrophysiology.</li>
<li>The basic logic of CXO is that there should be no significant fluctuations with the success or failure of a specific drug, unless this drug significantly increases total medical expenditure.</li>
<li>
<a href="https://www.smartkarma.com/entities/zylox-tonbridge-medical-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32974:1" rel="noopener">Zylox-Tonbridge Medical Technology (2190 HK) </a>achieved high performance growth in 2022, and is a beneficiary of centralized procurement policy at the current stage.However, it still has to face some challenges.</li>
</ul>


The Beijing Medical Insurance Bureau issued a notice soliciting opinions on the linkage program of DRG payment and VBP policy in the city, involving sports medicine, neuro-intervention, and electrophysiology.
The basic logic of CXO is that there should be no significant fluctuations with the success or failure of a specific drug, unless this drug significantly increases total medical expenditure.

Zylox-Tonbridge Medical Technology (2190 HK) achieved high performance growth in 2022, and is a beneficiary of centralized procurement policy at the current stage.However, it still has to face some challenges.


China Healthcare Weekly (May.19) - "Hedge Logic" Of CXO, Beijing's DRG+VBP Policy, Zylox-Tonbridge

<ul>
<li>With the launch of new products and their accelerated admission to hospitals, Acotec's revenue streams become more diversified, which would enhance its own risk resistance ability and core competitiveness.</li>
<li>Considering market size/increasing competition, Acotec’s growth ceiling is obvious if relies solely on domestic market. It becomes crucial whether Boston Scientific's acquisition would bring expected value or have other intentions.</li>
<li>How much room for improvement in future valuation depends on Acotec's performance in overseas markets. After all, if there is no internationalization breakthrough, Acotec's valuation logic would not be reshaped.</li>
</ul>


With the launch of new products and their accelerated admission to hospitals, Acotec's revenue streams become more diversified, which would enhance its own risk resistance ability and core competitiveness.
Considering market size/increasing competition, Acotec’s growth ceiling is obvious if relies solely on domestic market. It becomes crucial whether Boston Scientific's acquisition would bring expected value or have other intentions.
How much room for improvement in future valuation depends on Acotec's performance in overseas markets. After all, if there is no internationalization breakthrough, Acotec's valuation logic would not be reshaped.


Acotec Scientific (6669.HK) - What Value Boston Scientific Will Bring Is Crucial to Future Valuation

China

Acotec Scientific is a medical technology company specializing in the research, development, and application of innovative solutions for vascular diseases. Its core products include drug-coated balloons (DCB) and percutaneous transluminal angioplasty (PTA) balloon catheters, such as AcoArt Orchid & Dhalia. The company was founded in 2008 and is headquartered in Beijing, China.

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Acotec Scientific (6669 HK)