HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Anhui Province publicly solicits pre-bid data for the provincial centralized procurement of Class B large medical equipment, surgical robots included, which is worth investors’ attention.</li>
<li>No more than five biotech would truly stand out in the future. We suggest investors focus on those biotech in the first echelon, rather than betting on riskier smaller ones.</li>
<li>For Jafron, we analyzed some key points of the company. Due to the concerns, the temporary rebound in performance in 2023 is not enough to completely reverse the investment logic.</li>
</ul>


Anhui Province publicly solicits pre-bid data for the provincial centralized procurement of Class B large medical equipment, surgical robots included, which is worth investors’ attention.
No more than five biotech would truly stand out in the future. We suggest investors focus on those biotech in the first echelon, rather than betting on riskier smaller ones.
For Jafron, we analyzed some key points of the company. Due to the concerns, the temporary rebound in performance in 2023 is not enough to completely reverse the investment logic.


China Healthcare Weekly (Apr.14)- Surgical Robot VBP, Only 5 Biotech to Stand Out, Jafron Biomedical

Shanghai MicroPort MedBot / Equity Bottom-Up

<ul>
<li>No matter how good a story is, it needs to be supported by sales data.If sales of Toumai cannot scale up, the complete closed-loop of surgical robot+consumables+solution/service would be groundless.</li>
<li>The commercialization dilemma has become “a dark cloud” for Medbot. Before Medbot makes any breakthrough in internationalization or establishes an effective profit model in China, the Company lacks investment logic.</li>
<li>The catalyst for stock prices from favorable policies is not lasting. Weaker-than-expected financial performance would quickly throw valuations into correction. As things stand, Medbot is only suitable for short-term trade.</li>
</ul>


No matter how good a story is, it needs to be supported by sales data.If sales of Toumai cannot scale up, the complete closed-loop of surgical robot+consumables+solution/service would be groundless.
The commercialization dilemma has become “a dark cloud” for Medbot. Before Medbot makes any breakthrough in internationalization or establishes an effective profit model in China, the Company lacks investment logic.
The catalyst for stock prices from favorable policies is not lasting. Weaker-than-expected financial performance would quickly throw valuations into correction. As things stand, Medbot is only suitable for short-term trade.


Shanghai MicroPort MedBot Group (2252.HK) - The Truth Behind the Beautiful Story Is Becoming Clearer

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 10th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for China Mobile, Tencent, China Vanke, ICBC, CCB.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 10th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for China Mobile, Tencent, China Vanke, ICBC, CCB.


Hong Kong Connect Flows (Mar 10th): China Mobile, Tencent, China Vanke, ICBC, CCB

Equity Capital Markets

Shenzhen Edge Medical / Equity Capital Markets

<ul>
<li>MP1000 has strong technical strength, setting it apart from Toumai. SP1000’s advantages are more obvious and the competitive landscape is also better than multi-port surgical robots, indicating corner overtaking opportunity.</li>
<li>With favorable policy support, <a href="https://www.smartkarma.com/entities/shenzhen-edge-medical-co-ltd" target="_blank" data-smartkarma-citation="entities:35912:1" rel="noopener">Shenzhen Edge Medical (SEM HK)</a> is embracing a golden opportunity. But the commercialization outlook of surgical robots in China is actually not optimistic.</li>
<li>As a later-comer in surgical robots industry, without the synergy from parent company, Edge’s future sales performance could be even weaker. So, its valuation should be lower than Medbot.</li>
</ul>


MP1000 has strong technical strength, setting it apart from Toumai. SP1000’s advantages are more obvious and the competitive landscape is also better than multi-port surgical robots, indicating corner overtaking opportunity.
With favorable policy support, Shenzhen Edge Medical (SEM HK) is embracing a golden opportunity. But the commercialization outlook of surgical robots in China is actually not optimistic.
As a later-comer in surgical robots industry, without the synergy from parent company, Edge’s future sales performance could be even weaker. So, its valuation should be lower than Medbot.


Pre-IPO Shenzhen Edge Medical - The Surgical Robot Business in China Is Proving Harder than Expected

Shandong Weigao Group Medical Polymer / Equity Bottom-Up

Shandong Weigao Group Medical Polymer (1066 HK)

<ul>
<li>Weigao formed a diversified product lines through a series of acquisitions and capital operation. Its performance is more driven by sales not R&amp;D, with limited core competitiveness.</li>
<li>Weigao’s orthopaedic products business is under pressure due to VBP, which would drag down the overall gross margin. The acquisition of Weigao New Life is hard to turn things around.</li>
<li>Weigao is a holding platform, which is worthless in secondary market.There could be some temporary rebounds but share price could still underperform or its valuation is lower than comparable companies.</li>
</ul>


Weigao formed a diversified product lines through a series of acquisitions and capital operation. Its performance is more driven by sales not R&amp;D, with limited core competitiveness.
Weigao’s orthopaedic products business is under pressure due to VBP, which would drag down the overall gross margin. The acquisition of Weigao New Life is hard to turn things around.
Weigao is a holding platform, which is worthless in secondary market.There could be some temporary rebounds but share price could still underperform or its valuation is lower than comparable companies.


Shandong Weigao Group Medical Polymer (1066.HK) - As a Holding Platform, Investment Value Is Limited

China

Shanghai MicroPort MedBot is a surgical robot company that designs, develops, manufactures, and commercializes surgical robots and associated digital surgical solutions. Its product portfolio covers surgical specialties including endoscopy, orthopedics, vascular intervention, natural orifice surgery, and percutaneous puncture, with key products like the Toumai laparoscopic surgical robot, DFVision 3D electronic laparoscope, and SkyWalker orthopedic surgical robot. The company is headquartered in Shanghai, China, and was officially established in 2015.

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Shanghai MicroPort MedBot (2252 HK)

China Healthcare Weekly (Apr.14)- Surgical Robot VBP, Only 5 Biotech to Stand Out, Jafron Biomedical

Anhui Province starts VBP on medical equipment, including surgical robot.No more than 5 biotech will truly stand out, so just focus on them.For...

Xinyao (Criss) Wang

Shanghai MicroPort MedBot Group (2252.HK) - The Truth Behind the Beautiful Story Is Becoming Clearer

Medbot's financial performance was unsatisfactory.It's unsustainable to rely solely on favorable policy to drive valuation.Before any breakthrough...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Mar 10th): China Mobile, Tencent, China Vanke, ICBC, CCB

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for China Mobile, Tencent, China Vanke, ICBC, CCB.

Ke Yan, CFA, FRM

Pre-IPO Shenzhen Edge Medical - The Surgical Robot Business in China Is Proving Harder than Expected

Surgical robots is always a hot field, but even with favorable policy, it’s difficult to make profits in China. Edge's commercialization outlook is...

Xinyao (Criss) Wang

Shandong Weigao Group Medical Polymer (1066.HK) - As a Holding Platform, Investment Value Is Limited

Weigao is lack of core competitiveness due to weak R&D. Its performance could improve after China reopens, but Weigao could still underperform its...

Xinyao (Criss) Wang

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