HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orbusneich-medical-group-holdings-limited" target="_blank" data-smartkarma-citation="entities:34918:1" rel="noopener">OrbusNeich Medical Group (NEICHZ HK)</a> has a rich pipeline with a leadership position in the PCI balloon markets.</li>
<li>Its global business layout would also help the Company “hedge” the negative domestic policy impact or regulation changes.</li>
<li>However, the fierce competition, market pattern, industry characteristics, centralized procurement and other concerns should not be neglected.</li>
</ul>



OrbusNeich Medical Group (NEICHZ HK) has a rich pipeline with a leadership position in the PCI balloon markets.
Its global business layout would also help the Company “hedge” the negative domestic policy impact or regulation changes.
However, the fierce competition, market pattern, industry characteristics, centralized procurement and other concerns should not be neglected.


Pre-IPO OrbusNeich Medical Group - The Industry, the Business and the Concerns

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Venus Medtech (Hangzhou) / 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

HeMo Bioengineering / Equity Capital Markets

<ul>
<li>It is worth rejoicing that <a href="https://www.smartkarma.com/entities/hemo-bioengineering-limited" target="_blank" data-smartkarma-citation="entities:34169:1" rel="noopener">HeMo Bioengineering (HMB HK)</a> has entered commercialization stage, but some of the key products are in-licensed from other companies, not self-developed.</li>
<li>In front of fierce competition and policy impact, how to establish its high moat in R&amp;D, innovation and commercialization capability would be the key factors to support long-term development.</li>
<li>Our view is that opportunities coexist with challenges, and investors should also pay attention to the market sentiment towards new IPOs at that time.</li>
</ul>


It is worth rejoicing that HeMo Bioengineering (HMB HK) has entered commercialization stage, but some of the key products are in-licensed from other companies, not self-developed.
In front of fierce competition and policy impact, how to establish its high moat in R&amp;D, innovation and commercialization capability would be the key factors to support long-term development.
Our view is that opportunities coexist with challenges, and investors should also pay attention to the market sentiment towards new IPOs at that time.


Pre-IPO HeMo Bioengineering - Insights on Industry, Business and Concerns

China

Peijia Medical is a China-based company specializing in the research, development, and manufacturing of high-end interventional medical devices. It provides comprehensive treatment solutions for structural heart diseases, including transcatheter aortic valve replacement (TAVR) systems, and neurovascular diseases with various neurointerventional devices. The company was founded in 2012 and is headquartered in Suzhou, China.

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Peijia Medical (9996 HK)

Pre-IPO OrbusNeich Medical Group - The Industry, the Business and the Concerns

The rich pipeline and large global business will help OrbusNeich “hedge” negative domestic policy impact. But fierce competition, slow progress in...

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

Pre-IPO HeMo Bioengineering - Insights on Industry, Business and Concerns

We analyzed the industry characteristics, the business and competitive landscape of HeMo. The centralized procurement, commercialization...

Xinyao (Criss) Wang

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