HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>NHSA will set aside a certain market to provide space for innovative medical devices/consumables to explore the market in addition to centralized procurement. However, we tend to be cautiously optimistic.</li>
<li>We think it is important to clarify for investors what constitutes "commercialization success" – That is to generate revenue at scale and stable profitability through the sale of drugs.</li>
<li>All the products that covered by VBP begin to lose logic. Don't be fooled by those positive interpretations. We are bearish on the sectors with downward logic in long cycle. </li>
</ul>


NHSA will set aside a certain market to provide space for innovative medical devices/consumables to explore the market in addition to centralized procurement. However, we tend to be cautiously optimistic.
We think it is important to clarify for investors what constitutes "commercialization success" – That is to generate revenue at scale and stable profitability through the sale of drugs.
All the products that covered by VBP begin to lose logic. Don't be fooled by those positive interpretations. We are bearish on the sectors with downward logic in long cycle. 


China Healthcare Weekly(Sep9)-Innovative Device Policy,Commercial Success Definition,Don't Be Fooled

Equity Bottom-Up

Shanghai MicroPort Endovascula / Equity Bottom-Up

<ul>
<li>The aortic product line would bring strong growth in 1-2 years. From 3 years or longer term, Endovascular’s peripheral vascular interventional devices would be the main driver for high growth.</li>
<li>We don’t think the centralized procurement would be a concern for the time being. As many products are or will apply for CE Mark, the progress of internationalization is promising.</li>
<li>The current valuation is very attractive. Due to the pandemic/lockdown in China and many external uncertainties, share price could go lower, but it's still a good company to invest in.</li>
</ul>


The aortic product line would bring strong growth in 1-2 years. From 3 years or longer term, Endovascular’s peripheral vascular interventional devices would be the main driver for high growth.
We don’t think the centralized procurement would be a concern for the time being. As many products are or will apply for CE Mark, the progress of internationalization is promising.
The current valuation is very attractive. Due to the pandemic/lockdown in China and many external uncertainties, share price could go lower, but it's still a good company to invest in.


Shanghai Microport Endovascular MedTech (688016.CH) 21/22Q1 - This Is a Company Worth Investing In

<ul>
<li>Although Endovastec has leading position in aortic products, the growth space of this field in China is relatively limited and is not enough to support the long-term development of Endovastec.</li>
<li>The lack of revolutionary blockbuster product/candidate with global pricing power as well as the current weak international business layout are also the concerns.</li>
<li>Our view is that <a href="https://www.smartkarma.com/entities/shanghai-microport-endovas-a" target="_blank" data-smartkarma-citation="entities:30310:1" rel="noopener">Shanghai Microport Endovascular MedTech (688016 CH)</a> (Endovastec) is a good company, but it is not as attractive as <a href="https://www.smartkarma.com/entities/lifetech-scientific-corp" target="_blank" data-smartkarma-citation="entities:13181:1" rel="noopener">Lifetech Scientific (1302 HK)</a> at the current stage.</li>
</ul>


Although Endovastec has leading position in aortic products, the growth space of this field in China is relatively limited and is not enough to support the long-term development of Endovastec.
The lack of revolutionary blockbuster product/candidate with global pricing power as well as the current weak international business layout are also the concerns.
Our view is that Shanghai Microport Endovascular MedTech (688016 CH) (Endovastec) is a good company, but it is not as attractive as Lifetech Scientific (1302 HK) at the current stage.


Shanghai Microport Endovascular MedTech (688016.CH) - Not as Attractive as Lifetech

Global Healthcare Analyst

Tina Banerjee

Shanghai HeartCare Medical Technology / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-heartcare-medical-technology" target="_blank" data-smartkarma-citation="entities:32192:1" rel="noopener">Shanghai HeartCare Medical Technology (6609 HK)</a> has leadership positioning in China’s neuro-intervention medical device market. The company has an attractive product portfolio with large addressable market.</li>
<li>Core product, Captor is expected to earn revenue of RMB656 million in 2030. Patent infringement lawsuit against Medtronic regarding Heartcare’s core product Captor remains a major overhang on the stock.</li>
<li>Heartcare shares plunged 24% since its listing in August. The company aims to commercialize 10 products between 2022 and 2025. Investors with high-risk appetite can take position.</li>
</ul>



Shanghai HeartCare Medical Technology (6609 HK) has leadership positioning in China’s neuro-intervention medical device market. The company has an attractive product portfolio with large addressable market.
Core product, Captor is expected to earn revenue of RMB656 million in 2030. Patent infringement lawsuit against Medtronic regarding Heartcare’s core product Captor remains a major overhang on the stock.
Heartcare shares plunged 24% since its listing in August. The company aims to commercialize 10 products between 2022 and 2025. Investors with high-risk appetite can take position.


Shanghai HeartCare Medcl(6609 HK): Comprehensive Stroke Produce Portfolio Comes with a Pinch of Salt

<ul>
<li>With both strong innovation and internationalization capability, Lifetech is more resistant to risks and have greater development space and long-term value, which is not common in China healthcare industry. </li>
<li>The biggest concerns currently are the policy risks and the potential deterioration of international relations.</li>
<li>But overall, Lifetech is a still company worth investor’s attention. Our view is that its future valuation would be higher than that of <a href="https://www.smartkarma.com/entities/shanghai-microport-endovas-a" target="_blank" data-smartkarma-citation="entities:30310:1" rel="noopener">Shanghai Microport Endovascular MedTech (688016 CH)</a>.</li>
</ul>


With both strong innovation and internationalization capability, Lifetech is more resistant to risks and have greater development space and long-term value, which is not common in China healthcare industry. 
The biggest concerns currently are the policy risks and the potential deterioration of international relations.
But overall, Lifetech is a still company worth investor’s attention. Our view is that its future valuation would be higher than that of Shanghai Microport Endovascular MedTech (688016 CH).


Lifetech Scientific (1302.HK) - A “dark Horse” in China Innovative Device Industry

China

Lifetech Scientific Corporation develops, manufactures and markets minimally invasive interventional medical devices for cardiovascular and peripheral vascular diseases and disorders.  The Company produces congenital heart defect occluders, vena cava filters, stent grafts, balloon catheters, and vascular plugs.

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Lifetech Scientific (1302 HK)

China Healthcare Weekly(Sep9)-Innovative Device Policy,Commercial Success Definition,Don't Be Fooled

We recommend cautiously optimistic about new innovative device policy. It's important to clarify what constitutes "commercialization success". All...

Xinyao (Criss) Wang

Shanghai Microport Endovascular MedTech (688016.CH) 21/22Q1 - This Is a Company Worth Investing In

Endovascular’s product lines and promising internationalization will bring strong growth. The centralized procurement wouldn't be a concern for the...

Xinyao (Criss) Wang

Shanghai Microport Endovascular MedTech (688016.CH) - Not as Attractive as Lifetech

This insight analyzed Endovastec about the industry characteristics of aortic and peripheral products, the business layout, and the concerns on...

Xinyao (Criss) Wang

Shanghai HeartCare Medcl(6609 HK): Comprehensive Stroke Produce Portfolio Comes with a Pinch of Salt

Comprehensive and innovative product portfolio addressing large patient pool is the key positive for the company. However, ongoing patent...

Tina Banerjee

Lifetech Scientific (1302.HK) - A “dark Horse” in China Innovative Device Industry

This insight analyzed Lifetech in terms of its three main product lines, the growth points and the outlook in the future, short-term catalysts and...

Xinyao (Criss) Wang

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