HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Zylox-Tonbridge Medical Technology / Equity Bottom-Up

<ul>
<li>Zylox is a beneficiary of VBP and it has turned losses into profits. 2024 full-year revenue could be up 40-50% YoY. Net profit could be close to RMB100 million.</li>
<li>Whether in terms of the number of products on the market or the efficiency of R&amp;D, Zylox's performance is superior to peers.Its valuation is expected to be higher than peers.</li>
<li>We’re in a bear market, together with weak liquidity, Zylox's valuation doesn’t fully reflect its strong fundamentals. So, while this is a good company, investors may need to be patient.</li>
</ul>


Zylox is a beneficiary of VBP and it has turned losses into profits. 2024 full-year revenue could be up 40-50% YoY. Net profit could be close to RMB100 million.
Whether in terms of the number of products on the market or the efficiency of R&amp;D, Zylox's performance is superior to peers.Its valuation is expected to be higher than peers.
We’re in a bear market, together with weak liquidity, Zylox's valuation doesn’t fully reflect its strong fundamentals. So, while this is a good company, investors may need to be patient.


Zylox-Tonbridge Medical Technology (2190.HK) - A Good Alpha-Generating Opportunity for Investors

Equity Capital Markets

Zylox-Tonbridge Medical Technology / Equity Capital Markets

<p>On March 23, <a href="https://www.smartkarma.com/entities/zylox-tonbridge-medical-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32974:1" rel="noopener">Zylox-Tonbridge Medical Technology (ZYL HK)</a> submitted its listing application to the Hong Kong Stock Exchange and plans to be listed on the main board. Zylox-Tonbridge was founded in 2012. Since its inception, the Company has adopted and executed the strategic business model of developing innovative medical devices and solutions, focusing on the neuro- and peripheral-vascular interventional medical device market in China. The following mainly included insights on industry characteristics, business analysis and financial position. </p>

On March 23, Zylox-Tonbridge Medical Technology (ZYL HK) submitted its listing application to the Hong Kong Stock Exchange and plans to be listed on the main board. Zylox-Tonbridge was founded in 2012. Since its inception, the Company has adopted and executed the strategic business model of developing innovative medical devices and solutions, focusing on the neuro- and peripheral-vascular interventional medical device market in China. The following mainly included insights on industry characteristics, business analysis and financial position. 

Pre-IPO Zylox-Tonbridge Medical Technology - Promising Market with Challenges

Thematic (Sector/Industry)

<ul>
<li>APIs, generic drugs, CXO, low-end medical consumables will be hit the most due to tariffs.Investors are advised to be cautious on these subsectors as companies’ performance would be negatively affected. </li>
<li>As the tariff war is heating up, blood products, innovative medical device, innovative drugs, chain pharmacies, innovative medical services, pharmaceutical distribution business could be "safe haven assets" for investors. </li>
<li>The logic behind tariffs is to attack China's effective supply and trigger China's overcapacity problem, thereby weakening effective demand and reducing capital accumulation rate, so as to attack the RMB.</li>
</ul>


APIs, generic drugs, CXO, low-end medical consumables will be hit the most due to tariffs.Investors are advised to be cautious on these subsectors as companies’ performance would be negatively affected. 
As the tariff war is heating up, blood products, innovative medical device, innovative drugs, chain pharmacies, innovative medical services, pharmaceutical distribution business could be "safe haven assets" for investors. 
The logic behind tariffs is to attack China's effective supply and trigger China's overcapacity problem, thereby weakening effective demand and reducing capital accumulation rate, so as to attack the RMB.


The Impact of Trump's Tariffs on China Healthcare - The Victims, And the Safe Haven Assets

<ul>
<li>The third batch of VBP results of the National TCM Patent Medicines were released. Some products experienced over 90% price reduction. The price decline of exclusive varieties was moderate.</li>
<li>The VBP results of cochlear implants and peripheral vascular stents were released. Both foreign and domestic companies participated in the VBP actively, hoping to increase market share in China. </li>
<li>The key is to see whether 2024 full-year performance can meet expectations, which is the bottom line for WuXi Bio. Without a definitive long-term logic, short-term trading is recommended.</li>
</ul>


The third batch of VBP results of the National TCM Patent Medicines were released. Some products experienced over 90% price reduction. The price decline of exclusive varieties was moderate.
The VBP results of cochlear implants and peripheral vascular stents were released. Both foreign and domestic companies participated in the VBP actively, hoping to increase market share in China. 
The key is to see whether 2024 full-year performance can meet expectations, which is the bottom line for WuXi Bio. Without a definitive long-term logic, short-term trading is recommended.


China Healthcare Weekly (Jan.5)-TCM VBP Update, Medical Device VBP Result Is Out, WuXi Bio's Outlook

Acotec Scientific Holdings / Equity Bottom-Up

<ul>
<li>Acotec’s 2023 performance was unsatisfactory. Core products suffered weak growth. Positive trend of continuing to optimize revenue structure was broken. Sales of latecomers’ competing products would expand rapidly in 2024/2025. </li>
<li>Revenue proportion in overseas markets was still below 5% in 2023. If no highlights in Acotec’s cooperation with Boston Scientific in 2024, this collaboration could be considered a failure.</li>
<li>Due to VBP, margin could further decline. If it's just the current situation, then Acotec is not as good as Zylox-Tonbridge. So, its valuation should also be lower than Zylox-Tonbridge.</li>
</ul>


Acotec’s 2023 performance was unsatisfactory. Core products suffered weak growth. Positive trend of continuing to optimize revenue structure was broken. Sales of latecomers’ competing products would expand rapidly in 2024/2025. 
Revenue proportion in overseas markets was still below 5% in 2023. If no highlights in Acotec’s cooperation with Boston Scientific in 2024, this collaboration could be considered a failure.
Due to VBP, margin could further decline. If it's just the current situation, then Acotec is not as good as Zylox-Tonbridge. So, its valuation should also be lower than Zylox-Tonbridge.


Acotec Scientific Holdings (6669.HK) - The Company Is Now In Trouble

China

Leading player in the neuro- and peripheral-vascular interventional medical device market in China.

Zylox-Tonbridge Medical Technology (2190 HK)

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Zylox-Tonbridge Medical Technology (2190 HK)