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 Group / 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 IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

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 Co / Equity Bottom-Up

<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 Group Co Ltd manufactures and sells medical equipment. The Companu produces and sells laparoscopic surgery robots, orthopedic surgical robots, and other products. Shanghai MicroPort MedBot Group markets its products throughout China.

Shanghai MicroPort MedBot Group (2252 HK)

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Shanghai MicroPort MedBot Group (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