HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Beijing Chunlizhengda Medical Instruments / Equity Bottom-Up

Beijing Chunlizhengda Medical Instruments (1858 HK)

Beijing Chunlizhengda Medical Instruments

<p>Different from <a href="https://www.smartkarma.com/entities/ak-medical-holdings-limited" target="_blank" data-smartkarma-citation="entities:23669:1" rel="noopener">AK Medical Holdings Limited (1789 HK)</a> who was a big domestic winner in the national centralized procurement of artificial joints this month with the whole product lines successfully included in the medical insurance catalogue, <a href="https://www.smartkarma.com/entities/beijing-chunlizhengda-medical-instruments-co-ltd" target="_blank" data-smartkarma-citation="entities:7568:1" rel="noopener">Beijing Chunlizhengda Medical Instruments (1858 HK)</a> lost the bidding of its important knee joint prosthesis products in this centralized procurement. The Company's share price fell for two consecutive trading days by 17% on Sep.15 and 8.21% on Sep.16. This insight mainly analyzed the potential impact of losing the bidding, the concerns and the business outlook of Chunlizhengda.</p>

Different from AK Medical Holdings Limited (1789 HK) who was a big domestic winner in the national centralized procurement of artificial joints this month with the whole product lines successfully included in the medical insurance catalogue, Beijing Chunlizhengda Medical Instruments (1858 HK) lost the bidding of its important knee joint prosthesis products in this centralized procurement. The Company's share price fell for two consecutive trading days by 17% on Sep.15 and 8.21% on Sep.16. This insight mainly analyzed the potential impact of losing the bidding, the concerns and the business outlook of Chunlizhengda.

Chunlizhengda Medical Instruments (1858.HK) - The Concerns and the Outlook After Losing the Bidding

AK Medical Holdings Limited / Equity Bottom-Up

<p>On September 14, 2021, the results of the national centralized procurement of artificial joints was released. This is the second national centralized procurement on high-value consumables organized by the State after the coronary stents last year. <a href="https://www.smartkarma.com/entities/ak-medical-holdings-limited" target="_blank" data-smartkarma-citation="entities:23669:1" rel="noopener">AK Medical Holdings Limited (1789 HK)</a>, one of the leading companies in the field of joint implants, offered low prices in several rounds of bidding and its products were successfully included in the medical insurance catalogue. On that day, AK Medical’s share price increased over 20%. This insight mainly analyzed the industry characteristics, the impact of centralized procurement on AK Medical’s business and the outlook of the Company.</p>

On September 14, 2021, the results of the national centralized procurement of artificial joints was released. This is the second national centralized procurement on high-value consumables organized by the State after the coronary stents last year. AK Medical Holdings Limited (1789 HK), one of the leading companies in the field of joint implants, offered low prices in several rounds of bidding and its products were successfully included in the medical insurance catalogue. On that day, AK Medical’s share price increased over 20%. This insight mainly analyzed the industry characteristics, the impact of centralized procurement on AK Medical’s business and the outlook of the Company.

AK Medical Holdings Limited (1789.HK) - A Safe Landing After the Centralized Procurement

<p><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> is an innovation-driven medical device platform with a diversified product portfolio covering cardiovascular, orthopedics, cardiac rhythm management (“CRM”), endovascular, neurovascular, heart valve, surgical robot and other business. The Company’s high valuation mainly comes from the outlook and embrace of new technologies and new fields. In order to ensure the sustainability of R&amp;D investment, retain talent and maintain growth momentum, subsidiaries were spun-off and then listed one by one when they became mature. Finally, the scope of MicroPort is also expanded, and then the focus can be put on incubating new companies. However, this “unique” pattern of development has also raised questions, especially when compared with <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a>, together with the poor financial performance in 2020, perhaps it is a good time to see some concerns of MicroPort.</p>

Microport Scientific (853 HK) is an innovation-driven medical device platform with a diversified product portfolio covering cardiovascular, orthopedics, cardiac rhythm management (“CRM”), endovascular, neurovascular, heart valve, surgical robot and other business. The Company’s high valuation mainly comes from the outlook and embrace of new technologies and new fields. In order to ensure the sustainability of R&amp;D investment, retain talent and maintain growth momentum, subsidiaries were spun-off and then listed one by one when they became mature. Finally, the scope of MicroPort is also expanded, and then the focus can be put on incubating new companies. However, this “unique” pattern of development has also raised questions, especially when compared with Shenzhen Mindray Bio-Medical Electronics (300760 CH), together with the poor financial performance in 2020, perhaps it is a good time to see some concerns of MicroPort.

Microport Scientific (853.HK) - It Is a Good Time to See Some Concerns

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

<p>This Insight summarizes the takeaways from a recent China healthcare industry conference focused on biopharmaceuticals and medical devices, and builds on our Originals Insight <a href="https://www.smartkarma.com/insights/asian-healthcare-coming-of-age" target="_blank" data-smartkarma-citation="insights:45676" rel="noopener">Asian Healthcare - Coming of Age</a>.  Topics addressed include value-based purchasing for drugs and devices; development of commercial health insurance; internet hospitals and online pharmacies; DRGs for hospitals; issues for medical device companies; and amendments to China's patent laws.</p>

This Insight summarizes the takeaways from a recent China healthcare industry conference focused on biopharmaceuticals and medical devices, and builds on our Originals Insight Asian Healthcare - Coming of Age.  Topics addressed include value-based purchasing for drugs and devices; development of commercial health insurance; internet hospitals and online pharmacies; DRGs for hospitals; issues for medical device companies; and amendments to China's patent laws.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/hangzhou-kangji-medical-instrument-co-ltd" target="_blank" data-smartkarma-citation="entities:28938:1" rel="noopener">Kangji Medical (9997 HK)</a> is the largest domestic minimally invasive surgical instruments and accessories (MISIA) platform in China, with a 2.7% share of China’s MISIA market in 2019, according to CIC. Kangji will commence trading on Monday, 29 June. Kangji priced its IPO at HK$13.88, at the top-end of the indicative price range of HK$12.36-13.88 per share. Kangji raised net proceeds of HK$2,955.5 million ($381 million).</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/kangji-medical-ipo-initiation-the-cutting-edge" target="_blank" rel="noopener">our initiation note</a>, we stated that Kangji has strong fundamentals and is a good IPO candidate, in our view. In light of Kangji's attractive fundamentals and the improving sentiment towards H-listed medtech peers (based on the multiple expansion), we think that the IPO price is attractive. </p></div></div></div>

Kangji Medical (9997 HK) is the largest domestic minimally invasive surgical instruments and accessories (MISIA) platform in China, with a 2.7% share of China’s MISIA market in 2019, according to CIC. Kangji will commence trading on Monday, 29 June. Kangji priced its IPO at HK$13.88, at the top-end of the indicative price range of HK$12.36-13.88 per share. Kangji raised net proceeds of HK$2,955.5 million ($381 million).In our initiation note, we stated that Kangji has strong fundamentals and is a good IPO candidate, in our view. In light of Kangji's attractive fundamentals and the improving sentiment towards H-listed medtech peers (based on the multiple expansion), we think that the IPO price is attractive. 

China

Beijing Chunlizhengda Medical Instruments is a leading Chinese manufacturer of orthopedic medical devices. The company specializes in the research, development, production, and sale of high-end implants and surgical instruments, including joint prostheses, spinal products, sports medicine, trauma products, and surgical robots. It was founded in 1998 and is headquartered in Beijing, China.

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Beijing Chunlizhengda Medical Instruments (1858 HK)

Chunlizhengda Medical Instruments (1858.HK) - The Concerns and the Outlook After Losing the Bidding

This article mainly analyzed Chunlizhengda in terms of the potential impact of losing the bidding on the hip joint prosthesis products, the...

Xinyao (Criss) Wang

AK Medical Holdings Limited (1789.HK) - A Safe Landing After the Centralized Procurement

The article mainly analyzed AK Medical in terms of the industry characteristics of joint implants in China,the impact of centralized procurement on...

Xinyao (Criss) Wang

Microport Scientific (853.HK) - It Is a Good Time to See Some Concerns

This article analyzed Microport's core businesses after its worst financial performance in 2020, the policy impact, the potential risks, the...

Xinyao (Criss) Wang

China Healthcare: Macro Themes

This Insight summarizes the takeaways from a recent China healthcare industry conference. There is much talk of pressures on the industry, but...

Kemp Dolliver, CFA

Kangji Medical IPO: Trading Debut

Kangji Medical (9997 HK) is the largest domestic minimally invasive surgical instruments and accessories (MISIA) platform in China, with a 2.7%...

Arun George

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