External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

AK Medical Holdings Limited / Equity Bottom-Up

<ul><li>Despite the negative impact of COVID-19 on surgery demand for orthopedic implants, AK Medical reported FY22E revenue of RMB1,052.0mn, up 38.2% YoY, primarily driven by the revenue growth in hip and knee implants (+44.7% YoY) after the VBP as well as the ICOS customized products (101.3% YoY). GPM was 60.5% (-5.1 ppt) due to the price reduction after VBP.</li><li>Thanks to the significant reduction in selling expense ratio after the VBP, attributable net profit increased by 121.1% YoY in FY22, 5.9%/ 4.4% above CMBI/ consensus estimates.</li><li>Strong volume growth after VBP more than offset the price cut. In 2022, sales volume of the primary hip system increased by 81% YoY and the primary knee system increased by 130% YoY, attributable to the increasing demand in primary hip and knee replacement operations after VBP.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Despite the negative impact of COVID-19 on surgery demand for orthopedic implants, AK Medical reported FY22E revenue of RMB1,052.0mn, up 38.2% YoY, primarily driven by the revenue growth in hip and knee implants (+44.7% YoY) after the VBP as well as the ICOS customized products (101.3% YoY). GPM was 60.5% (-5.1 ppt) due to the price reduction after VBP.Thanks to the significant reduction in selling expense ratio after the VBP, attributable net profit increased by 121.1% YoY in FY22, 5.9%/ 4.4% above CMBI/ consensus estimates.Strong volume growth after VBP more than offset the price cut. In 2022, sales volume of the primary hip system increased by 81% YoY and the primary knee system increased by 130% YoY, attributable to the increasing demand in primary hip and knee replacement operations after VBP.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

AK Medical (1789 HK) – Higher growth certainty in 2023E

<ul><li>AK Medical reported a positive profit alert for FY22E, expecting revenue to increase by over 35% YoY and net profit attributable to shareholders to increase by over 100% YoY, both of which are largely in line with the consensus estimates.</li><li>Strong demand of AK Medical’s products after the implementation of joint VBP.</li><li>The revenue growth in FY22E was primarily driven by the strong demand of artificial joints. As a big winner in the national joint VBP, AK Medical has been allocated approximately 81,000 pieces, which ranked first among all brands.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

AK Medical reported a positive profit alert for FY22E, expecting revenue to increase by over 35% YoY and net profit attributable to shareholders to increase by over 100% YoY, both of which are largely in line with the consensus estimates.Strong demand of AK Medical’s products after the implementation of joint VBP.The revenue growth in FY22E was primarily driven by the strong demand of artificial joints. As a big winner in the national joint VBP, AK Medical has been allocated approximately 81,000 pieces, which ranked first among all brands.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

AK Medical (1789 HK) – Accelerating import substitution; positive outlook of 2023E

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>The benefits of assisted reproduction being covered by medical insurance are limited. Its main role is still to delay not fundamentally reverse the decline of China's birth rate.</li>
<li>If the valuation collapse occurs collectively in one field, it basically reflects that Miss Market does not hold much hope for this field in the future, such as cell therapy. </li>
<li>We mainly analyzed some key points of the companies that investors may be interested in, such as <a href="https://www.smartkarma.com/entities/iray-technology-company-limited" target="_blank" data-smartkarma-citation="entities:35716:1" rel="noopener">iRay Technology (688301 CH)</a> and <a href="https://www.smartkarma.com/entities/shanghai-medicilon-inc" target="_blank" data-smartkarma-citation="entities:30368:1" rel="noopener">Shanghai Medicilon Inc (688202 CH)</a>.</li>
</ul>


The benefits of assisted reproduction being covered by medical insurance are limited. Its main role is still to delay not fundamentally reverse the decline of China's birth rate.
If the valuation collapse occurs collectively in one field, it basically reflects that Miss Market does not hold much hope for this field in the future, such as cell therapy. 
We mainly analyzed some key points of the companies that investors may be interested in, such as iRay Technology (688301 CH) and Shanghai Medicilon Inc (688202 CH).


China Healthcare Weekly (Feb.10) - Assisted Reproduction into NRDL, Cell Therapy, Medicilon, IRay,

<ul>
<li>We saw some rebounds of <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>’s share price recently, which was mainly driven by the catalysts from the policy side. However, such rebounds would not last. </li>
<li>Microport’s development mode is unfavorable to investors. It’s not surprising for Microport to underperform or its valuation to be lower than expected. We recommend investors to focus more on Microport's subsidiaries.</li>
<li>The communication between Microport and investors has a problem, leading investors to think the management's no longer credible. How to repay the US$700 million convertible bond is also a problem.</li>
</ul>


We saw some rebounds of Microport Scientific (853 HK)’s share price recently, which was mainly driven by the catalysts from the policy side. However, such rebounds would not last. 
Microport’s development mode is unfavorable to investors. It’s not surprising for Microport to underperform or its valuation to be lower than expected. We recommend investors to focus more on Microport's subsidiaries.
The communication between Microport and investors has a problem, leading investors to think the management's no longer credible. How to repay the US$700 million convertible bond is also a problem.


Microport Scientific (853.HK) - Underperformance Would Be the Norm

<div><div><div><div><ul><li>1H22 earnings beat. AK Medical reported 1H22 revenue of RMB531.2mn, up 18.7% YoY, primarily driven by the revenue growth in revision replacement implants and ICOS customised products as well as significant sales volume growth of artificial joints post the implementation of national joint VBP.</li><li>Gross profit was RMB338.5mn, up 9.8% YoY. Gross profit margin was 63.7%, higher than the previous guidance of 55-60%, thanks to the delayed implementation of VBP and the decline in raw material costs.</li><li>Attributable net profit was RMB126.0mn, up 13.1%YoY, accounting for 77.8% of our previous full-year forecast mainly driven by higher-than-expected revenue growth and better-than- expected operating margins.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

1H22 earnings beat. AK Medical reported 1H22 revenue of RMB531.2mn, up 18.7% YoY, primarily driven by the revenue growth in revision replacement implants and ICOS customised products as well as significant sales volume growth of artificial joints post the implementation of national joint VBP.Gross profit was RMB338.5mn, up 9.8% YoY. Gross profit margin was 63.7%, higher than the previous guidance of 55-60%, thanks to the delayed implementation of VBP and the decline in raw material costs.Attributable net profit was RMB126.0mn, up 13.1%YoY, accounting for 77.8% of our previous full-year forecast mainly driven by higher-than-expected revenue growth and better-than- expected operating margins.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

AK Medical (1789 HK) – Net Profit Beat Due to Significant Volume Growth Post VBP

China

AK Medical Holdings Limited manufactures medical devices. The Company produces and sells orthopedic implants, spinal interbody cages, artificial vertebral bodies, and other products. AK Medical Holdings markets its products throughout Hong Kong.

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AK Medical Holdings Limited (1789 HK)

AK Medical (1789 HK) – Higher growth certainty in 2023E

Thanks to the significant reduction in selling expense ratio after the VBP, attributable net profit increased by 121.1% YoY in FY22, 5.9%/ 4.4%...

CMB International

AK Medical (1789 HK) – Accelerating import substitution; positive outlook of 2023E

AK Medical reported a positive profit alert for FY22E, expecting revenue to increase by over 35% YoY and net profit attributable to shareholders to...

CMB International

China Healthcare Weekly (Feb.10) - Assisted Reproduction into NRDL, Cell Therapy, Medicilon, IRay,

Medical insurance coverage of assisted reproduction has limited positive effects;Mr Market may not hold much hope for cell therapy after valuation...

Xinyao (Criss) Wang

Microport Scientific (853.HK) - Underperformance Would Be the Norm

Microport’s development model is unfavorable to investors, leading to underperformance of share price. Investors may no longer trust the management...

Xinyao (Criss) Wang

AK Medical (1789 HK) – Net Profit Beat Due to Significant Volume Growth Post VBP

Accelerated hospital coverage thanks to VBP tender wins. Since Apr 2022, joint VBP has been implemented in most provinces except Shanghai and Anhui.

CMB International

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