HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<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

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Seazen (Formerly Future Land) / Event-Driven

<ul>
<li>In this latest installment in a series dating back to March 2018, I've analysed 5,500 moves over three years inside CCASS, targeting &gt;5% of shares outstanding of individual stocks. </li>
<li>The data continues to bear out the overall underperformance of stocks that exhibit such moves.</li>
<li>Additionally, the movement of large blocks of shares may illustrate that the beneficial owner of those shares has pledged them as collateral for a loan.</li>
</ul>


In this latest installment in a series dating back to March 2018, I've analysed 5,500 moves over three years inside CCASS, targeting &gt;5% of shares outstanding of individual stocks. 
The data continues to bear out the overall underperformance of stocks that exhibit such moves.
Additionally, the movement of large blocks of shares may illustrate that the beneficial owner of those shares has pledged them as collateral for a loan.


CCASS: Why Large Moves Continue To Matter

Thematic (Sector/Industry)

<ul>
<li>Recently, the VBP results of Chinese patent medicine led by Guangdong Alliance were released.Investors had better confirm whether their products have been included in VBP before investing in related stocks.</li>
<li>The reason why domestic pharmaceutical companies lag behind foreign companies is not only the innovation capability or clinical speed, but also the ability to actively identify innovation and thinking mode.</li>
<li>There would be quite a few consolidations or acquisitions of Biotech at low prices. There could also be some delisting of Biotech in secondary market in the coming year.</li>
</ul>


Recently, the VBP results of Chinese patent medicine led by Guangdong Alliance were released.Investors had better confirm whether their products have been included in VBP before investing in related stocks.
The reason why domestic pharmaceutical companies lag behind foreign companies is not only the innovation capability or clinical speed, but also the ability to actively identify innovation and thinking mode.
There would be quite a few consolidations or acquisitions of Biotech at low prices. There could also be some delisting of Biotech in secondary market in the coming year.


China Healthcare Weekly (Apr.22) - TCM VBP Results, R&D Thinking Mode, Biotech Delisting

<ul>
<li>Laparoscopic surgical robots are one of the most important R&amp;D directions of surgical robots, which is the largest market segment and can be applied in a broad range of surgeries.</li>
<li>The launch of laparoscopic surgical robot from domestic companies with high cost performance would be very helpful to seize the markets with great potential in early stage of the industry.</li>
<li>The medical insurance coverage offers a viable way for the commercialization of surgical robots in China, which is important. The revenue/profits generated from disposables and services would be more attractive.</li>
</ul>


Laparoscopic surgical robots are one of the most important R&amp;D directions of surgical robots, which is the largest market segment and can be applied in a broad range of surgeries.
The launch of laparoscopic surgical robot from domestic companies with high cost performance would be very helpful to seize the markets with great potential in early stage of the industry.
The medical insurance coverage offers a viable way for the commercialization of surgical robots in China, which is important. The revenue/profits generated from disposables and services would be more attractive.


Industry Report – Insights on China Surgical Robots Industry

<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

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)

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

CCASS: Why Large Moves Continue To Matter

I've analysed 5,500 moves over three years inside CCASS, targeting >5% of shares outstanding. The data continues to bear out the overall...

David Blennerhassett

China Healthcare Weekly (Apr.22) - TCM VBP Results, R&D Thinking Mode, Biotech Delisting

Guangdong Alliance released the VBP results of TCM; The ability to identify innovation and the thinking mode is more important for Pharma; There...

Xinyao (Criss) Wang

Industry Report – Insights on China Surgical Robots Industry

We analyzed the China surgical robots industry in terms of market potential, policy support, laparoscopic surgical robots from domestic companies...

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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