HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Even starting late,Peijia took the lead in the number of hospitals entered and sales volume in the 1st year after product launch.It could be a dark horse to achieve corner overtaking. </li>
<li>The ceiling of China TAVR market is obvious due to high surgery cost and severe shortage of doctors/qualified hospitals. Future price war due to fierce competition is also a concern.</li>
<li>Related TAVR companies’ high valuation cannot be supported without sufficient incremental markets. So, if companies hope to break the ceiling, they have to develop global markets.</li>
</ul>


Even starting late,Peijia took the lead in the number of hospitals entered and sales volume in the 1st year after product launch.It could be a dark horse to achieve corner overtaking. 
The ceiling of China TAVR market is obvious due to high surgery cost and severe shortage of doctors/qualified hospitals. Future price war due to fierce competition is also a concern.
Related TAVR companies’ high valuation cannot be supported without sufficient incremental markets. So, if companies hope to break the ceiling, they have to develop global markets.


Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) Vs CardioFlow (2160.HK) - Dilemma of TAVR Market

<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

Thematic (Sector/Industry)

<ul>
<li>Recently, Premier Li Keqiang delivered the government work report, which mentioned 2022 pharmaceutical industry's priorities. We summarized the key points below.</li>
<li>The skyrocketed experimental monkey price should be noticed, which would put more pressure on biotech companies. CXO also needs to control costs, both its own personnel and the monkeys.</li>
<li>The market value of a pharmaceutical enterprise is not determined by technology patent,but by the market competitiveness of products, which is based on R&amp;D capabilities and deep technology accumulation.</li>
</ul>


Recently, Premier Li Keqiang delivered the government work report, which mentioned 2022 pharmaceutical industry's priorities. We summarized the key points below.
The skyrocketed experimental monkey price should be noticed, which would put more pressure on biotech companies. CXO also needs to control costs, both its own personnel and the monkeys.
The market value of a pharmaceutical enterprise is not determined by technology patent,but by the market competitiveness of products, which is based on R&amp;D capabilities and deep technology accumulation.


China Healthcare Weekly (Mar.11) - 2022 Government Work Report, Expensive Monkeys, Technology Patent

Equity Capital Markets

Shanghai NewMed Medical / Equity Capital Markets

<ul>
<li>From <a href="https://www.smartkarma.com/entities/shanghai-newmed-medical-co-ltd" target="_blank" data-smartkarma-citation="entities:34126:1" rel="noopener">Shanghai NewMed Medical (NMM HK)</a>’s pipeline, it can be seen that almost all the candidates do not have obvious advantages in development progress in front of the competing products.</li>
<li>NewMed has little experience in launching and commercializing product candidates, especially as a late-comer. So, the actual commercialization performance could be lower than expected.</li>
<li>Since there are so many uncertainties as well as the poor market sentiment for new IPOs in HKEX, we are conservative about the outlook of NewMed at the current stage.</li>
</ul>


From Shanghai NewMed Medical (NMM HK)’s pipeline, it can be seen that almost all the candidates do not have obvious advantages in development progress in front of the competing products.
NewMed has little experience in launching and commercializing product candidates, especially as a late-comer. So, the actual commercialization performance could be lower than expected.
Since there are so many uncertainties as well as the poor market sentiment for new IPOs in HKEX, we are conservative about the outlook of NewMed at the current stage.


Pre-IPO Shanghai NewMed Medical - Concerns on Fierce Competition and Future Commercialization

<ul>
<li>
<a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK)</a> is taking the lead in TAVR industry, but <a href="https://www.smartkarma.com/entities/peijia-medical" target="_blank" data-smartkarma-citation="entities:28862:1" rel="noopener">Peijia Medical (9996 HK)</a> has advantages in development progress of future products. So, the market pattern is not yet determined.</li>
<li>The high cost of TAVR surgery is the main reason for lower-than-expected sales performance of related companies and low market penetration. The fierce competition would also bring more challenges. </li>
<li>A good solution is to enter developing markets with CE mark, which would offer a new commercialization option and also a wider expansion beyond just European and American markets.</li>
</ul>



Venus MedTech (2500 HK) is taking the lead in TAVR industry, but Peijia Medical (9996 HK) has advantages in development progress of future products. So, the market pattern is not yet determined.
The high cost of TAVR surgery is the main reason for lower-than-expected sales performance of related companies and low market penetration. The fierce competition would also bring more challenges. 
A good solution is to enter developing markets with CE mark, which would offer a new commercialization option and also a wider expansion beyond just European and American markets.


Peijia Medical (9996.HK) Vs Venus MedTech (2500.HK) Vs CardioFlow (2160.HK)-Pain Points and Solution

China

Microport Cardioflow Medtech Corporation develops and sells medical devices. The Company manufactures and sells vitaflow aortic valve system, alwide balloon catheter, and other products. Microport Cardioflow Medtech markets its products throughout China.

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Microport Cardioflow Medtech (2160 HK)

Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) Vs CardioFlow (2160.HK) - Dilemma of TAVR Market

The high surgery cost and severe shortage of qualified doctors hospitals are two main bottlenecks for China TAVR market. Entering global markets is...

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

China Healthcare Weekly (Mar.11) - 2022 Government Work Report, Expensive Monkeys, Technology Patent

We listed the key points about healthcare industry in 2022 government work report. Companies should notice the skyrocketed experimental monkey...

Xinyao (Criss) Wang

Pre-IPO Shanghai NewMed Medical - Concerns on Fierce Competition and Future Commercialization

We analyzed the industry characteristics of heart valve device market. Concerns of NewMed are mainly the slow product development progress, fierce...

Xinyao (Criss) Wang

Peijia Medical (9996.HK) Vs Venus MedTech (2500.HK) Vs CardioFlow (2160.HK)-Pain Points and Solution

We analyzed the TAVR business of Venus, MicroPort CardioFlow and Peijia. We also analyzed the competition pattern, concerns, pain points of TAVR...

Xinyao (Criss) Wang

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