HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>In 2021/1H, the neuro-interventional industry attracted great enthusiasm from investors, but starting from 2021/2H, things began to change and investors quickly returned to rationality.</li>
<li>The major concerns are the product homogenization, fierce market competition and the negative impact of centralized procurement policy. We summarized our policy interpretation to help investors make a prediction.</li>
<li>In terms of future trends, the grassroots market and the international markets are the breakthrough points for domestic neuro-interventional enterprises, which would be the main criteria for decision-making.</li>
</ul>


In 2021/1H, the neuro-interventional industry attracted great enthusiasm from investors, but starting from 2021/2H, things began to change and investors quickly returned to rationality.
The major concerns are the product homogenization, fierce market competition and the negative impact of centralized procurement policy. We summarized our policy interpretation to help investors make a prediction.
In terms of future trends, the grassroots market and the international markets are the breakthrough points for domestic neuro-interventional enterprises, which would be the main criteria for decision-making.


Concerns and Outlook on China Neuro-Interventional Industry

<ul>
<li>While the final results of 2021 national medical insurance negotiation have yet to be announced, here are what's circulating in the market.</li>
<li>The centralized procurement on spring coil in Hebei province would start soon, which means that the centralized procurement in the field of neuro-intervention in China has officially begun.</li>
<li>There is a phenomenon of "valuation upside down" in the primary and secondary market of healthcare investment, so we recommend investors to be more cautious and rational.</li>
</ul>


While the final results of 2021 national medical insurance negotiation have yet to be announced, here are what's circulating in the market.
The centralized procurement on spring coil in Hebei province would start soon, which means that the centralized procurement in the field of neuro-intervention in China has officially begun.
There is a phenomenon of "valuation upside down" in the primary and secondary market of healthcare investment, so we recommend investors to be more cautious and rational.


China Healthcare Weekly (Nov.12)-Medical Insurance Negotiation,Spring Coil VBP,Valuation Upside Down

Industry viewpoints:<ul>
<li>The recent centralized procurement on spring coil in Hebei province could be a warning to the relevant enterprises.</li>
<li>The NHSA pointed out that it will explore feasible ways to include dental items into the payment scope of commercial insurance.</li>
<li>We expect to see AI deeply integrated into the new drug development process and revolutionize the industry in the future.</li>
</ul>Company news:News about the updated progress on new drugs and cooperation agreement of <a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso Biopharma Inc (9926 HK)</a>, <a href="https://www.smartkarma.com/entities/cspc-pharmaceutical-group-ltd" target="_blank" data-smartkarma-citation="entities:229:1" rel="noopener">CSPC Pharmaceutical Group (1093 HK)</a> and <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a>. Market review:Last week, stock price for healthcare sector in A share increased 3.74%, while CSI 300 decreased 0.37% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
The recent centralized procurement on spring coil in Hebei province could be a warning to the relevant enterprises.
The NHSA pointed out that it will explore feasible ways to include dental items into the payment scope of commercial insurance.
We expect to see AI deeply integrated into the new drug development process and revolutionize the industry in the future.
Company news:News about the updated progress on new drugs and cooperation agreement of Akeso Biopharma Inc (9926 HK), CSPC Pharmaceutical Group (1093 HK) and Everest Medicines (1952 HK). Market review:Last week, stock price for healthcare sector in A share increased 3.74%, while CSI 300 decreased 0.37% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Sep.24) - VBP on Neuro-Intervention, Payment System Changes, AI in Drug R&D

Equity Capital Markets

Medcaptain Medical Technology / Equity Capital Markets

<ul>
<li>Medcaptain has a certain level of innovation ability, which has solidified the Company’s market position, as evidenced by its leading rankings in China’s infusion workstation and enteral feeding pump market.</li>
<li>However, multiple niche markets where Medcaptain operates are all in a state of high competition/high concentration. Certain of Medcaptain’s products are facing the risk of VBP, leading to performance uncertainties. </li>
<li>Post-Money valuation in 2023 was RMB8.245 billion. Based on the current performance, we think valuation of Medcaptain should be lower than Mindray and Zylox, but would be higher than Microport.</li>
</ul>


Medcaptain has a certain level of innovation ability, which has solidified the Company’s market position, as evidenced by its leading rankings in China’s infusion workstation and enteral feeding pump market.
However, multiple niche markets where Medcaptain operates are all in a state of high competition/high concentration. Certain of Medcaptain’s products are facing the risk of VBP, leading to performance uncertainties. 
Post-Money valuation in 2023 was RMB8.245 billion. Based on the current performance, we think valuation of Medcaptain should be lower than Mindray and Zylox, but would be higher than Microport.


Pre-IPO Medcaptain Medical Technology - The Strength and the Concerns

Equity Bottom-Up

Zylox-Tonbridge Medical Technology / Equity Bottom-Up

Zylox-Tonbridge Medical Technology (2190 HK)

<ul>
<li>We strongly disagree with the valuation method of "P/R". which is calculated by dividing market value by R&amp;D expenses. It is still necessary to view the valuation system rationally.</li>
<li>Innovent surprisingly turned loss into profits for the first time in 25H1. Considering the future contribution of mazdutide and IBI363, valuation of Innovent may reach above RMB200 billion.</li>
<li>The logic of Zylox is import substitution. Based on strong fundamentals, if liquidity remains strong, reasonable P/E is 40-45x. Target share price is HK$25-29/share based on 2025 net profit.</li>
</ul>


We strongly disagree with the valuation method of "P/R". which is calculated by dividing market value by R&amp;D expenses. It is still necessary to view the valuation system rationally.
Innovent surprisingly turned loss into profits for the first time in 25H1. Considering the future contribution of mazdutide and IBI363, valuation of Innovent may reach above RMB200 billion.
The logic of Zylox is import substitution. Based on strong fundamentals, if liquidity remains strong, reasonable P/E is 40-45x. Target share price is HK$25-29/share based on 2025 net profit.


China Healthcare Weekly (Aug.31) - P/R Ratio Is Meaningless, Innovent, Zylox-Tonbridge 25H1 Results

China

Zylox-Tonbridge Medical Technology is a medical technology company dedicated to the innovative research, development, manufacturing, and commercialization of neurovascular and peripheral vascular interventional devices. Its product portfolio includes devices such as the Thrombite Clot Retriever Device, Ultrafree Drug Coated PTA Balloon Catheter, and Zenflex Peripheral Stent System. The company was founded in 2012 and is headquartered in Hangzhou, China.

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Zylox-Tonbridge Medical Technology (2190 HK)

Concerns and Outlook on China Neuro-Interventional Industry

The insight analyzed China neuro-interventional industry including the reason of cool-down in primary market, the product homogenization, fierce...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.12)-Medical Insurance Negotiation,Spring Coil VBP,Valuation Upside Down

This insight mainly analyzed some news circulating about 2021 national medical insurance negotiation results, VBP on spring coil in Hebei and...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.24) - VBP on Neuro-Intervention, Payment System Changes, AI in Drug R&D

This article analyzed the centralized procurement on spring coil in Hebei province, commercial insurance coverage for dental items, AI in new drug...

Xinyao (Criss) Wang

Pre-IPO Medcaptain Medical Technology - The Strength and the Concerns

Medcaptain's innovative products have solidified its leading market position in China, but high competition and performance uncertainties may...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.31) - P/R Ratio Is Meaningless, Innovent, Zylox-Tonbridge 25H1 Results

The valuation method of "P/R" that is calculated by dividing market value by R&D expense is meaningless.Innovent turns profit, with valuation...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Concerns and Outlook on China Neuro-Interventional Industry

The insight analyzed China neuro-interventional industry including the reason of cool-down in primary market, the product homogenization, fierce...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.12)-Medical Insurance Negotiation,Spring Coil VBP,Valuation Upside Down

This insight mainly analyzed some news circulating about 2021 national medical insurance negotiation results, VBP on spring coil in Hebei and...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.24) - VBP on Neuro-Intervention, Payment System Changes, AI in Drug R&D

This article analyzed the centralized procurement on spring coil in Hebei province, commercial insurance coverage for dental items, AI in new drug...

Xinyao (Criss) Wang

Pre-IPO Medcaptain Medical Technology - The Strength and the Concerns

​Medcaptain's innovative products have solidified its leading market position in China, but high competition and performance uncertainties may...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.31) - P/R Ratio Is Meaningless, Innovent, Zylox-Tonbridge 25H1 Results

The valuation method of "P/R" that is calculated by dividing market value by R&D expense is meaningless.Innovent turns profit, with valuation...

Xinyao (Criss) Wang

Medcaptain's innovative products have solidified its leading market position in China, but high competition and performance uncertainties may...