HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

Star Sports Medicine / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/star-sports-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:45717:1" rel="noopener">Star Sports Medicine (1609 HK)</a> is in an excellent position to gain market share from the overseas players in China, given its increased popularity among hospitals.</li>
<li>The company is expected to achieve an EPS CAGR of 21.5% between FY25 and FY28F, fueled by revenue growth and a steady expansion in gross margin.</li>
<li>Its IPO is priced at 20.1x FY26F PER. By attributing a 20% premium over the global average, it equals a fair price of HK$106.7, an upside of 8%.</li>
</ul>



Star Sports Medicine (1609 HK) is in an excellent position to gain market share from the overseas players in China, given its increased popularity among hospitals.
The company is expected to achieve an EPS CAGR of 21.5% between FY25 and FY28F, fueled by revenue growth and a steady expansion in gross margin.
Its IPO is priced at 20.1x FY26F PER. By attributing a 20% premium over the global average, it equals a fair price of HK$106.7, an upside of 8%.


Star Sports Medicine (1609 HK) IPO: Possibly Some Upside

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>Star Sports Medicine, a medical device company specializing in clinical sports medicine solutions, has launched HK IPO consisting of 8.4M H shares at an offer price of HK$98.50 per share.</li>
<li>The company seeks to raise ~$105M to expand production capacity, fund R&amp;D efforts, and enhance commercialization capabilities. Subscriptions will close on April 29, with expected listing on May 5.</li>
<li>Despite negative impact from VBP and fierce competition from global players, the company is seeing marginal ASP improvement for its medical implants, which is leading margin recovery.</li>
</ul>


Star Sports Medicine, a medical device company specializing in clinical sports medicine solutions, has launched HK IPO consisting of 8.4M H shares at an offer price of HK$98.50 per share.
The company seeks to raise ~$105M to expand production capacity, fund R&amp;D efforts, and enhance commercialization capabilities. Subscriptions will close on April 29, with expected listing on May 5.
Despite negative impact from VBP and fierce competition from global players, the company is seeing marginal ASP improvement for its medical implants, which is leading margin recovery.


Star Sports Medicine IPO: Medical Implant Led Margin Recovery in 2025 Raises Hope

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>There’s a decrease in selling price due to VBP. If future sales volume growth cannot offset the impact of price reduction, it will have significant adverse effect on STAR SPORTS.</li>
<li>International companies seized the majority of the market share, and local enterprises are making cross-industry expansions. For STAR SPORTS, the greater challenge lies in the unfavorable industry competition situation.</li>
<li>STAR SPORTS can achieve RMB164-236 million net profit in next three years. P/E of 15-25x is comfortable, with the corresponding valuation of RMB2.46-5.9 billion based on 2026 and 2028 forecast.  </li>
</ul>


There’s a decrease in selling price due to VBP. If future sales volume growth cannot offset the impact of price reduction, it will have significant adverse effect on STAR SPORTS.
International companies seized the majority of the market share, and local enterprises are making cross-industry expansions. For STAR SPORTS, the greater challenge lies in the unfavorable industry competition situation.
STAR SPORTS can achieve RMB164-236 million net profit in next three years. P/E of 15-25x is comfortable, with the corresponding valuation of RMB2.46-5.9 billion based on 2026 and 2028 forecast.  


Pre-IPO Star Sports Medicine (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>STAR SPORTS establishes close cooperative relationships by providing discounted arthroscopic surgical equipment to hospitals, thereby driving sustained sales of high-margin implant consumables.This is a common business model in the industry.</li>
<li>STAR SPORTS is seizing market share of foreign companies by taking advantage of VBP, but if sales volume growth cannot offset price reductions, it will put pressure on profitability.</li>
<li>Considering its higher growth potential based on import substitution logic, valuation of STAR SPORTS would be higher than peers.A comfortable range could be P/S of 4-6x or P/E of 15-25x.</li>
</ul>


STAR SPORTS establishes close cooperative relationships by providing discounted arthroscopic surgical equipment to hospitals, thereby driving sustained sales of high-margin implant consumables.This is a common business model in the industry.
STAR SPORTS is seizing market share of foreign companies by taking advantage of VBP, but if sales volume growth cannot offset price reductions, it will put pressure on profitability.
Considering its higher growth potential based on import substitution logic, valuation of STAR SPORTS would be higher than peers.A comfortable range could be P/S of 4-6x or P/E of 15-25x.


Pre-IPO Star Sports Medicine - The Business, the Concerns and the Valuation

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Victory Giant Technology (HuiZhou) / Index Rebalance

Victory Giant Technology (HuiZhou) (2476 HK)

<ul>
<li>There could be 55 potential inclusions and 14 potential deletions for the Hang Seng Composite Index in September. There are more stocks that are close on market cap/liquidity.</li>
<li>A lot of the potential adds are very recently listed stocks that have a limited trading history. The low free float could lead to price spikes in the stocks.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


There could be 55 potential inclusions and 14 potential deletions for the Hang Seng Composite Index in September. There are more stocks that are close on market cap/liquidity.
A lot of the potential adds are very recently listed stocks that have a limited trading history. The low free float could lead to price spikes in the stocks.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect (Sep 2026): Adds Outnumber Deletes as IPOs Dominate

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Star Sports Medicine (SSM HK)

Star Sports Medicine (1609 HK) IPO: Possibly Some Upside

Star Sports Medicine is poised to capture market share in China with growing hospital popularity, a projected 3-year EPS CAGR of 21.5%, IPO priced...

Osbert Tang, CFA

Star Sports Medicine IPO: Medical Implant Led Margin Recovery in 2025 Raises Hope

Star Sports has launched HK IPO consisting of 8.4M shares at HK$98.50/share. The company seeks to raise ~$105M to expand production capacity, fund...

Tina Banerjee

Pre-IPO Star Sports Medicine (PHIP Updates) - Some Points Worth the Attention

Decrease in selling price due to VBP may harm STAR SPORTS if sales volume growth doesn't offset it. Fierce competition poses a challenge. P/E of...

Xinyao (Criss) Wang

Pre-IPO Star Sports Medicine - The Business, the Concerns and the Valuation

STAR SPORTS leverages VBP to seize market share from foreign competitors, but facing profitability pressure in long term. Valuation would be...

Xinyao (Criss) Wang

HSCI Index Rebalance Preview and Stock Connect (Sep 2026): Adds Outnumber Deletes as IPOs Dominate

There could be 80 changes for the HSCI in March. That could result in 70 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Star Sports Medicine (1609 HK) IPO: Possibly Some Upside

​Star Sports Medicine is poised to capture market share in China with growing hospital popularity, a projected 3-year EPS CAGR of 21.5%, IPO priced...

Osbert Tang, CFA

Star Sports Medicine IPO: Medical Implant Led Margin Recovery in 2025 Raises Hope

Star Sports has launched HK IPO consisting of 8.4M shares at HK$98.50/share. The company seeks to raise ~$105M to expand production capacity, fund...

Tina Banerjee

Pre-IPO Star Sports Medicine (PHIP Updates) - Some Points Worth the Attention

​Decrease in selling price due to VBP may harm STAR SPORTS if sales volume growth doesn't offset it. Fierce competition poses a challenge. P/E of...

Xinyao (Criss) Wang

Pre-IPO Star Sports Medicine - The Business, the Concerns and the Valuation

​STAR SPORTS leverages VBP to seize market share from foreign competitors, but facing profitability pressure in long term. Valuation would be...

Xinyao (Criss) Wang

HSCI Index Rebalance Preview and Stock Connect (Sep 2026): Adds Outnumber Deletes as IPOs Dominate

There could be 80 changes for the HSCI in March. That could result in 70 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Star Sports Medicine is poised to capture market share in China with growing hospital popularity, a projected 3-year EPS CAGR of 21.5%, IPO priced...

Decrease in selling price due to VBP may harm STAR SPORTS if sales volume growth doesn't offset it. Fierce competition poses a challenge. P/E of...

STAR SPORTS leverages VBP to seize market share from foreign competitors, but facing profitability pressure in long term. Valuation would be...