HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Zylox-Tonbridge Medical Technology / Equity Bottom-Up

<ul>
<li>Zylox is a beneficiary of VBP and it has turned losses into profits. 2024 full-year revenue could be up 40-50% YoY. Net profit could be close to RMB100 million.</li>
<li>Whether in terms of the number of products on the market or the efficiency of R&amp;D, Zylox's performance is superior to peers.Its valuation is expected to be higher than peers.</li>
<li>We’re in a bear market, together with weak liquidity, Zylox's valuation doesn’t fully reflect its strong fundamentals. So, while this is a good company, investors may need to be patient.</li>
</ul>


Zylox is a beneficiary of VBP and it has turned losses into profits. 2024 full-year revenue could be up 40-50% YoY. Net profit could be close to RMB100 million.
Whether in terms of the number of products on the market or the efficiency of R&amp;D, Zylox's performance is superior to peers.Its valuation is expected to be higher than peers.
We’re in a bear market, together with weak liquidity, Zylox's valuation doesn’t fully reflect its strong fundamentals. So, while this is a good company, investors may need to be patient.


Zylox-Tonbridge Medical Technology (2190.HK) - A Good Alpha-Generating Opportunity for Investors

Equity Capital Markets

Zylox-Tonbridge Medical Technology / Equity Capital Markets

<p>On March 23, <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 (ZYL HK)</a> submitted its listing application to the Hong Kong Stock Exchange and plans to be listed on the main board. Zylox-Tonbridge was founded in 2012. Since its inception, the Company has adopted and executed the strategic business model of developing innovative medical devices and solutions, focusing on the neuro- and peripheral-vascular interventional medical device market in China. The following mainly included insights on industry characteristics, business analysis and financial position. </p>

On March 23, Zylox-Tonbridge Medical Technology (ZYL HK) submitted its listing application to the Hong Kong Stock Exchange and plans to be listed on the main board. Zylox-Tonbridge was founded in 2012. Since its inception, the Company has adopted and executed the strategic business model of developing innovative medical devices and solutions, focusing on the neuro- and peripheral-vascular interventional medical device market in China. The following mainly included insights on industry characteristics, business analysis and financial position. 

Pre-IPO Zylox-Tonbridge Medical Technology - Promising Market with Challenges

<ul>
<li>Among domestic enterprises, <a href="https://www.smartkarma.com/entities/microport-neurotech-limited" target="_blank" data-smartkarma-citation="entities:35379:1" rel="noopener">MicroPort NeuroTech (2172 HK)</a>’s product richness takes the lead. With the support 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>, the production quality system and capacity are relatively more guaranteed. </li>
<li>Fierce competition and centralized procurement are the major challenges, but the rich domestic distribution network and promising internationalization prospects would help NeuroTech find way out.</li>
<li>By reducing the size of the IPO to maintain a good share price, at the expense of stock liquidity, it doesn’t really solve the problem.There’s risk of overvaluation for NeuroTech.</li>
</ul>


Among domestic enterprises, MicroPort NeuroTech (2172 HK)’s product richness takes the lead. With the support of Microport Scientific (853 HK), the production quality system and capacity are relatively more guaranteed. 
Fierce competition and centralized procurement are the major challenges, but the rich domestic distribution network and promising internationalization prospects would help NeuroTech find way out.
By reducing the size of the IPO to maintain a good share price, at the expense of stock liquidity, it doesn’t really solve the problem.There’s risk of overvaluation for NeuroTech.


MicroPort NeuroTech (2172.HK) 22H1 - Advantages Deserve Recognition, but with Overvaluation Risk

<ul>
<li>Due to the centralized procurement in PRC market and decreasing volume of operations in overseas markets during pandemic, <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 2021 performance missed expectations. </li>
<li>Even if Microport could finally digest the negative impact of centralized procurement, its “unique” development mode would still put pressure and uncertainties on future performance/outlook, leading to lower-than-expected results.</li>
<li>Our earnings estimate of Microport in 2022 could be about HK$-1.7, and revenue estimate could be about HK$7.3 billion. It’s quite possible that the Company will not end up profitable.</li>
</ul>


Due to the centralized procurement in PRC market and decreasing volume of operations in overseas markets during pandemic, Microport Scientific (853 HK)’s 2021 performance missed expectations. 
Even if Microport could finally digest the negative impact of centralized procurement, its “unique” development mode would still put pressure and uncertainties on future performance/outlook, leading to lower-than-expected results.
Our earnings estimate of Microport in 2022 could be about HK$-1.7, and revenue estimate could be about HK$7.3 billion. It’s quite possible that the Company will not end up profitable.


Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance

MicroPort NeuroTech / Equity Capital Markets

<ul>
<li>The advantages of NeuroTech are mainly reflected in the comprehensive product portfolio and stable product performance, with higher gross margin, stronger cost control ability and first-mover advantage than its peers.</li>
<li>The major concerns here are the domestic shrinking market size due to the centralized procurement, the fierce market competition and the pain points on its sales model.</li>
<li>In terms of valuation, our view is that NeuroTech’s valuation could be higher than that of the peers such as Zylox-Tonbridge, HeartCare Medical, Peijia Medical and Sino Medical.</li>
</ul>


The advantages of NeuroTech are mainly reflected in the comprehensive product portfolio and stable product performance, with higher gross margin, stronger cost control ability and first-mover advantage than its peers.
The major concerns here are the domestic shrinking market size due to the centralized procurement, the fierce market competition and the pain points on its sales model.
In terms of valuation, our view is that NeuroTech’s valuation could be higher than that of the peers such as Zylox-Tonbridge, HeartCare Medical, Peijia Medical and Sino Medical.


Pre-IPO MicroPort NeuroTech - The Industry, the Business and the Concern

China

Shanghai HeartCare Medical Technology Corporation Limited develops and manufactures neuro-interventional medical devices. The Company produces ischemic stroke prevention devices, ischemic stroke thrombectomy devices, intracranial stenosis treatment devicies, vacular access devices, and more. Shanghai HeartCare Medical Technology conducts business in China.

Shanghai HeartCare Medical Technology (6609 HK)

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Shanghai HeartCare Medical Technology (6609 HK)

Zylox-Tonbridge Medical Technology (2190.HK) - A Good Alpha-Generating Opportunity for Investors

Zylox's strong fundamentals and growth potential have not been fully reflected in current valuation due to market conditions, making it a...

Xinyao (Criss) Wang

Pre-IPO Zylox-Tonbridge Medical Technology - Promising Market with Challenges

This insights analyzed Zylox-Tonbridge Medical Technology in terms of the market potential, industry characteristics, business analysis, financial...

Xinyao (Criss) Wang

MicroPort NeuroTech (2172.HK) 22H1 - Advantages Deserve Recognition, but with Overvaluation Risk

NeuroTech has advantages in product richness/quality system, but fierce competition/product homogenization, centralized procurement are major...

Xinyao (Criss) Wang

Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance

Microport’s 2021 performance missed expectations due to VBP and pandemic. Its “unique” development mode will lead to lower-than...

Xinyao (Criss) Wang

Pre-IPO MicroPort NeuroTech - The Industry, the Business and the Concern

NeuroTech's advantages include comprehensive product portfolio with stronger margin/cost control and first-mover advantage.But concerns are on...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Zylox-Tonbridge Medical Technology (2190.HK) - A Good Alpha-Generating Opportunity for Investors

​Zylox's strong fundamentals and growth potential have not been fully reflected in current valuation due to market conditions, making it a...

Xinyao (Criss) Wang

Pre-IPO Zylox-Tonbridge Medical Technology - Promising Market with Challenges

This insights analyzed Zylox-Tonbridge Medical Technology in terms of the market potential, industry characteristics, business analysis, financial...

Xinyao (Criss) Wang

MicroPort NeuroTech (2172.HK) 22H1 - Advantages Deserve Recognition, but with Overvaluation Risk

NeuroTech has advantages in product richness/quality system, but fierce competition/product homogenization, centralized procurement are major...

Xinyao (Criss) Wang

Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance

Microport’s 2021 performance missed expectations due to VBP and pandemic. Its “unique” development mode will lead to lower-than...

Xinyao (Criss) Wang

Pre-IPO MicroPort NeuroTech - The Industry, the Business and the Concern

NeuroTech's advantages include comprehensive product portfolio with stronger margin/cost control and first-mover advantage.But concerns are on...

Xinyao (Criss) Wang

Zylox's strong fundamentals and growth potential have not been fully reflected in current valuation due to market conditions, making it a...