HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

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

Zylox-Tonbridge Medical Technology / Equity Bottom-Up

<ul>
<li>The Beijing Medical Insurance Bureau issued a notice soliciting opinions on the linkage program of DRG payment and VBP policy in the city, involving sports medicine, neuro-intervention, and electrophysiology.</li>
<li>The basic logic of CXO is that there should be no significant fluctuations with the success or failure of a specific drug, unless this drug significantly increases total medical expenditure.</li>
<li>
<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 (2190 HK) </a>achieved high performance growth in 2022, and is a beneficiary of centralized procurement policy at the current stage.However, it still has to face some challenges.</li>
</ul>


The Beijing Medical Insurance Bureau issued a notice soliciting opinions on the linkage program of DRG payment and VBP policy in the city, involving sports medicine, neuro-intervention, and electrophysiology.
The basic logic of CXO is that there should be no significant fluctuations with the success or failure of a specific drug, unless this drug significantly increases total medical expenditure.

Zylox-Tonbridge Medical Technology (2190 HK) achieved high performance growth in 2022, and is a beneficiary of centralized procurement policy at the current stage.However, it still has to face some challenges.


China Healthcare Weekly (May.19) - "Hedge Logic" Of CXO, Beijing's DRG+VBP Policy, Zylox-Tonbridge

<ul>
<li>With the launch of new products and their accelerated admission to hospitals, Acotec's revenue streams become more diversified, which would enhance its own risk resistance ability and core competitiveness.</li>
<li>Considering market size/increasing competition, Acotec’s growth ceiling is obvious if relies solely on domestic market. It becomes crucial whether Boston Scientific's acquisition would bring expected value or have other intentions.</li>
<li>How much room for improvement in future valuation depends on Acotec's performance in overseas markets. After all, if there is no internationalization breakthrough, Acotec's valuation logic would not be reshaped.</li>
</ul>


With the launch of new products and their accelerated admission to hospitals, Acotec's revenue streams become more diversified, which would enhance its own risk resistance ability and core competitiveness.
Considering market size/increasing competition, Acotec’s growth ceiling is obvious if relies solely on domestic market. It becomes crucial whether Boston Scientific's acquisition would bring expected value or have other intentions.
How much room for improvement in future valuation depends on Acotec's performance in overseas markets. After all, if there is no internationalization breakthrough, Acotec's valuation logic would not be reshaped.


Acotec Scientific (6669.HK) - What Value Boston Scientific Will Bring Is Crucial to Future Valuation

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Acotec Scientific Holdings / Event-Driven

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a>’s partial offer from <a href="https://www.smartkarma.com/entities/boston-scientific-corp" target="_blank" data-smartkarma-citation="entities:11115:1" rel="noopener">Boston Scientific (BSX US)</a> at HK$20 per share is now unconditional. The final closing date is 9 February.</li>
<li>The current acceptances representing 78.59% of outstanding shares imply current proration is 82.71%. Current pro-ration suggests CA Medtech post-offer shares will be counted towards the public float.</li>
<li>Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share. </li>
</ul>


As expected, Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now unconditional. The final closing date is 9 February.
The current acceptances representing 78.59% of outstanding shares imply current proration is 82.71%. Current pro-ration suggests CA Medtech post-offer shares will be counted towards the public float.
Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share. 


Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional

<ul>
<li>
<a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a>’s partial offer from <a href="https://www.smartkarma.com/entities/boston-scientific-corp" target="_blank" data-smartkarma-citation="entities:11115:1" rel="noopener">Boston Scientific (BSX US)</a> at HK$20 per share is now open. The IFA opines it to be fair and reasonable.</li>
<li>The partial offer is conditional on the offeror hitting 50.01% voting rights. Irrevocables ensure that it will be declared unconditional on or before the first closing date (26 January).</li>
<li>Based on a minimum proration of 71.31% and at the current share price of HK$17.20 per share, the estimated breakeven price is HK$10.38 per share.</li>
</ul>



Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now open. The IFA opines it to be fair and reasonable.
The partial offer is conditional on the offeror hitting 50.01% voting rights. Irrevocables ensure that it will be declared unconditional on or before the first closing date (26 January).
Based on a minimum proration of 71.31% and at the current share price of HK$17.20 per share, the estimated breakeven price is HK$10.38 per share.


Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open

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)

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

Acotec’s 2023 results were disappointing due to VBP and anti-corruption campaign. Growth of core products declined significantly and the...

Xinyao (Criss) Wang

China Healthcare Weekly (May.19) - "Hedge Logic" Of CXO, Beijing's DRG+VBP Policy, Zylox-Tonbridge

Beijing issued new VBP+DRG policy for sports medicine/neurointervention/electrophysiology. CXO's "hedge logic" doesn't guarantee the whole industry...

Xinyao (Criss) Wang

Acotec Scientific (6669.HK) - What Value Boston Scientific Will Bring Is Crucial to Future Valuation

There're many highlights in Acotec’s performance last year,but growth ceiling is obvious if rely solely on China market.Boston Scientific's...

Xinyao (Criss) Wang

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional

Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share.

Arun George

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open

Irrevocables ensure that it will be declared unconditional on or before the first closing date. Based on a minimum proration of 71.31% and at the...

Arun George

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