HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Shanghai Municipal Medical Insurance Bureau issued a policy that TAVR consumables would be reimbursed according to surgery performance, breaking the bottleneck of low demand due to the expensive TAVR surgery.</li>
<li>The COVID nucleic acid testing industry faces the problem of exit, because it is very difficult to find a corresponding scale of replacement business for these huge capacity accumulated.</li>
<li>In terms of the internationalization prospects of China biotech companies, we prefer to pick RemeGen. The same logic also applies to Keymed.</li>
</ul>


Shanghai Municipal Medical Insurance Bureau issued a policy that TAVR consumables would be reimbursed according to surgery performance, breaking the bottleneck of low demand due to the expensive TAVR surgery.
The COVID nucleic acid testing industry faces the problem of exit, because it is very difficult to find a corresponding scale of replacement business for these huge capacity accumulated.
In terms of the internationalization prospects of China biotech companies, we prefer to pick RemeGen. The same logic also applies to Keymed.


China Healthcare Weekly (May.27) - New TAVR Policy, Exiting Issue of COVID Testing, RemeGen/Keymed

<ul>
<li>Last week, the focus of the 2022 Volume-Based Purchase (VBP) was finalized. We summarized the key points and major VBP projects to be promoted this year.</li>
<li>For IVD companies that seize the golden COVID-19 testing opportunity, they have already accumulated large amount of cash flow. It means M&amp;A opportunities but also bubbles in the industry. </li>
<li>The market value of a lot of medical device companies in HKEX has already been very small. Is the market overly pessimistic?</li>
</ul>


Last week, the focus of the 2022 Volume-Based Purchase (VBP) was finalized. We summarized the key points and major VBP projects to be promoted this year.
For IVD companies that seize the golden COVID-19 testing opportunity, they have already accumulated large amount of cash flow. It means M&amp;A opportunities but also bubbles in the industry. 
The market value of a lot of medical device companies in HKEX has already been very small. Is the market overly pessimistic?


China Healthcare Weekly (Apr.15)- 2022 VBP Focus, Post-COVID IVD Outlook, Undervalued Medical Device

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK)</a> is facing competition in China TAVR market and its market share has deteriorated to 70% in 2021 from 79.3% in 2018.</li>
<li>Due to declining ASP and low pricing power, the company’s gross profit margin has declined to 78% in 2021 from 86% in 2018.</li>
<li>During 2021, the company’s loss expanded 103% y/y to RMB372 million, mainly due to elevated selling and distribution expenses and R&amp;D costs.</li>
</ul>



Venus MedTech (2500 HK) is facing competition in China TAVR market and its market share has deteriorated to 70% in 2021 from 79.3% in 2018.
Due to declining ASP and low pricing power, the company’s gross profit margin has declined to 78% in 2021 from 86% in 2018.
During 2021, the company’s loss expanded 103% y/y to RMB372 million, mainly due to elevated selling and distribution expenses and R&amp;D costs.


Venus MedTech (2500 HK): Overcrowded Market, Margin Pressure, Expanding Loss

<ul>
<li>Even starting late,Peijia took the lead in the number of hospitals entered and sales volume in the 1st year after product launch.It could be a dark horse to achieve corner overtaking. </li>
<li>The ceiling of China TAVR market is obvious due to high surgery cost and severe shortage of doctors/qualified hospitals. Future price war due to fierce competition is also a concern.</li>
<li>Related TAVR companies’ high valuation cannot be supported without sufficient incremental markets. So, if companies hope to break the ceiling, they have to develop global markets.</li>
</ul>


Even starting late,Peijia took the lead in the number of hospitals entered and sales volume in the 1st year after product launch.It could be a dark horse to achieve corner overtaking. 
The ceiling of China TAVR market is obvious due to high surgery cost and severe shortage of doctors/qualified hospitals. Future price war due to fierce competition is also a concern.
Related TAVR companies’ high valuation cannot be supported without sufficient incremental markets. So, if companies hope to break the ceiling, they have to develop global markets.


Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) Vs CardioFlow (2160.HK) - Dilemma of TAVR Market

<ul>
<li>MicroPort’s net loss widened according to its profit warning. The negative impact of centralized procurement is already being shown. We analyzed the situation of its different business segments.</li>
<li>After continuous M&amp;A, <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> could face cash flow pressure in this unfriendly financing environment.</li>
<li>Due to MicroPort’s development mode, the market value of its subsidiaries could be higher than the parent company. Our view is that the subsidiaries would be a better investment.</li>
</ul>


MicroPort’s net loss widened according to its profit warning. The negative impact of centralized procurement is already being shown. We analyzed the situation of its different business segments.
After continuous M&amp;A, Microport Scientific (853 HK) could face cash flow pressure in this unfriendly financing environment.
Due to MicroPort’s development mode, the market value of its subsidiaries could be higher than the parent company. Our view is that the subsidiaries would be a better investment.


Microport Scientific (853.HK) - The Subsidiaries Would Be a Better Investment

China

Microport Cardioflow Medtech Corporation develops and sells medical devices. The Company manufactures and sells vitaflow aortic valve system, alwide balloon catheter, and other products. Microport Cardioflow Medtech markets its products throughout China.

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Microport Cardioflow Medtech (2160 HK)

China Healthcare Weekly (May.27) - New TAVR Policy, Exiting Issue of COVID Testing, RemeGen/Keymed

New TAVR policy will break the low demand bottleneck due to high cost; COVID testing industry faces the problem of exit; Remegen/Keymed may have...

Xinyao (Criss) Wang

China Healthcare Weekly (Apr.15)- 2022 VBP Focus, Post-COVID IVD Outlook, Undervalued Medical Device

The focus of 2022 VBP was finalized. In post-COVID era, how would cash-rich IVD companies with find new growth point?After continuous pullback,...

Xinyao (Criss) Wang

Venus MedTech (2500 HK): Overcrowded Market, Margin Pressure, Expanding Loss

Despite shares plunged 82% from highs, Venus MedTech is not a bottom-fishing idea, as unfavorable competitive landscape in its operating market...

Tina Banerjee

Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) Vs CardioFlow (2160.HK) - Dilemma of TAVR Market

The high surgery cost and severe shortage of qualified doctors hospitals are two main bottlenecks for China TAVR market. Entering global markets is...

Xinyao (Criss) Wang

Microport Scientific (853.HK) - The Subsidiaries Would Be a Better Investment

We analyzed the centralized procurement and other concerns on MicroPort. Due to its development mode, the subsidiaries are more attractive and...

Xinyao (Criss) Wang

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