Winter hangs 99.9% of its peers: a 10 billion 18A device company's market capitalization miracle

The market capitalization of 18A device companies is infinitely approaching or penetrating the "red line"

As of June 2022, the cash and equivalents on the books of Eagle Pupil Technology-B and Kunbo Medical-B were 1.

Since the wave of hellish killing in the unprofitable biotechnology sector of Hong Kong stocks, there are only two innovative device companies with a market value of more than 10 billion, namely minimally invasive robot-B and Baixinan-B

Surgical robot is a medical device product integrating medicine, mechanics, biomechanics and computer science, and is regarded by the market as the "crown on the instrument track"; As the first share of endoscopic surgical robots and the most valuable asset of the minimally invasive department, minimally invasive robots sit firmly in the position of a brother of 18A instruments, and the market does not seem to have much controversy

The second place in the ranking of "Bai Xin An" is more or less strange, and even said to be "an outlier in 18A"

What is even more surprising is that 99% of the 18A innovative device companies cannot defy the iron law of "the peak of the issuance market value", which is broken

(Trend since the listing of Baixinan)

Is it difficult to believe that Baixinan-B has an extraordinary investment value that exceeds market recognition?

01 The Magic of Peace of Mind

Not all of the 18A Innovative Devices companies that have gone public are "commercially crappy.

In 2021, there are already 8 device 18A companies to achieve more than 100 million revenue, combined with the above market value ranking, it is not difficult to find that "market value" and "revenue" have a certain correlation

Among them, the revenue of Qiming Medical-B and Xianruida Medical-B in 2021 has reached 416 million and 304 million, respectively; In the first half of 2022, Xianruida Medical-B achieved revenue of 175 million yuan and net profit of 31.

As of the close of trading on September 6, the market value of Qiming Medical and Xianruida Medical was HK$5.

At present, there are two core pipelines of Baixinan-B, namely degradable stents for coronary artery treatment and renal nerve blocking devices

The treatment of coronary heart disease is no stranger to everyone, and the interventional products range from ordinary balloons, metal stents, drug-carrying stents, and then to future degradable stents and drug-carrying balloons

In fact, the post-market release and growth logic of Baixinan's fully degradable stents is very clear, and the increase in the amount of PCI surgery and the partial replacement of the share of degradable stents for existing metal stents are increased

In the field of fully degradable biological scaffolds, Bai xinan is not the first player to eat crabs, Lepu's NeoVas and Shandong Boan Bio's Xinsorb were approved in 2019 and 2020 respectively, and Lepu Medical has achieved a better first-mover advantage in the commercialization of degradable stents and drug-carrying balloons (total revenue of more than 700 million); At the same time, judging from the research and development progress of the 4 enterprises under research, MicroPort started one-arm trials earlier than the company, and it is expected that the approval time of the two will be similar

Although Fro sullivan predicts that the penetration rate of fully degradable stents in PCI surgery in China will increase from 0.
8% in 2019 to 31% in 2030, not to mention whether the penetration rate can meet expectations, there are still more factors hindering the expansion of the degradable market, including: 1.
The coverage of future collection and procurement, and the shrinking profit margins of products; 2.
Competition of other flat substitutes; 3.
Whether the share substitution meets expectations, etc
.

In addition, it is also necessary to consider whether the company's future commercialization team can highlight the siege in the case of the encirclement and suppression of the three major equipment giants of Lepu, Minimally Invasive, and Xianjian
.

Renal nerve blocking devices (RDNs) for the treatment of hypertension, mainly used for the treatment of refractory hypertension and uncontrolled hypertension, this product seems to be more imaginative
.

The attraction of interventional hypertension for patients is that the procedure is very, very minimally invasive, and the side effects are very mild, which can make patients reduce the frequency of medication and even stop taking medicine
.

According to Frösllivan statistics, the number of patients with persistent hypertension in China and Japan in 2019 was 47.
61 million and 5.
213 million, respectively, and the number of patients with uncontrolled hypertension was about 200 million and 28.
87 million, respectively
.

Interventional treatment of hypertension was first proposed by the giant Medtronic, and Medtronic products are still undergoing clinical trials around the world to prove their effectiveness (Medtronic has clinical trials in some regions to obtain inactive results); In the RDN market in China and Japan, only Three are In the clinical stage, Baixinan, Meili Weiye and Xinmai Medical
.

The pie is big, but there will be a lot of problems
in the actual commercialization and market education.

● The clinical trials of the three domestic manufacturers began in 2016-2017, and the reasons why the clinical trial has not been completed so far may include: it is difficult to recruit patients (it is not easy to select suitable patients, patients have no knowledge of RDN therapy), doctor's approval and willingness;

● There is currently no RDN therapy on the market, and it is expected that like TAVR, market education and sales will take a long time to roll out;

● If most patients are not bothered about taking hypertension drugs and can be controlled, the high-priced RDN therapy is more expensive, and may be the last choice
.

The management of Baixinan expects that the fully degradable stent and renal nerve blocker device will be commercialized
in the third quarter of 2023 and the second quarter of 2023.

It is not difficult to see that the company's two core products are not exclusive or completely internationally leading & potentially optimal products, and there is great uncertainty in the rapid commercialization of the volume, and it is difficult to analyze the core logic
of Baixinan having several times the premium from the fundamentals.

02 Extraordinary Listing Road: A series of actions that cannot be understood

Since Preparing for the Hong Kong IPO, BaiXinan has somewhat come with buff
.

In November 2021, Baixinan's first IPO was close to the completion of the risk-related clearance, but it was returned by the Hong Kong Stock Exchange, when the market did not confirm the rumor that some subscribers had compliance problems
.

When the IPO was re-offered in December, the amount raised was HK$140 million more than for the first time, and the upper limit of the issue price was raised (the last public offering and the international placement were overtaken by 1.
52 times and 1.
16 times respectively).

In this IPO, the company raised a total of about HK$508 million, leaving more than HK$440 million (now about 390 million yuan)
to remove the listing fee.

In May 2022, Baixinan threw out a plan that surprised the market: the company planned to purchase no more than 1.
5 million shares of the company's shares in the market for equity incentives, talent retention and other purposes
.

At that time, the share price of Baixinan has reached 50 Hong Kong dollars per share, that is to say, the company will have to spend at least 75 million Hong Kong dollars to fully implement the plan
.

From another point of view, if the institutional funds subscribed to by the original IPO are locked up until now, then there has been more than double the floating profit
.

As of the mid-2022 report, the cash and equivalents on the company's books were about 653 million yuan, and from the company's expense side, both research and development expenses and administrative expenses have decreased, and the overall loss has decreased from 227 million yuan in 2021H1 to 115 million
.

If such R&D intensity and administrative expenditure are maintained, coupled with the scale of funds for repurchasing shares, the scale of funds raised by Hong Kong ipos is only enough for less than
1 and a half years.

Although this series of actions is very fascinating, The IPO of Baixinan has achieved "shareholders before and after the listing are happy", "solving the capital consumption of 1 and a half years", "earning brand power and reputation", and achieved
N in one fell swoop.

03 The final grand plan: listing on the Science and Technology Innovation Board

The puzzle vanished under the surface of a message
.

On 5 September 2022, Bacityn announced that the Board of Directors has resolved and approved the commencement of preparatory work
for the proposed initial public offering of the Company's common shares (traded in RMB) and listing on the Science and Technology Innovation Board of the Shanghai Stock Exchange.

Also recently, Lepu Bio applied to return to the Science and Technology Innovation Board for listing and trading, and applied for the distribution of 414 million shares, net raising OF 2.
5 billion yuan
after deducting listing expenses.

Often H+A is listed in two places, and the issuance inquiry will still be based on the value of the Hong Kong stock market for certain references, taking Rongchang Biologics as an example: the company's sci-tech innovation board issue price was 48 yuan (market value of 26.
1 billion yuan), and the market value of Hong Kong-listed Rongchang Biologics was still around HK$30 billion (now equivalent to 26.
5 billion yuan).

Lepu Bio's market capitalization is only HK$10.
9 billion, while Baixinan's market capitalization is ONLY HK$14.
4 billion
.

If the market value of Baixinan can be maintained at the current level, even if the market value of the market value of the sci-tech innovation board inquiry is discounted at 20% in the Hong Kong stock market, and then the newly issued shares account for 25% of the total plate, the fundraising scale will be at least 2.
5 billion yuan or more
.

Looking back, whether it is the funds used for repurchases or the funds for Hong Kong stock IPOs, it can be seen as a strategic boost
for the company to return to the science and technology innovation board.

2.
5 billion, whether it is strategic mergers and acquisitions, or expanding self-research & commercialization, is enough for Baixinan to exhibit more strategies and growth curves
.

Conclusion: At the end of the story, institutions, listed companies, and major shareholders seem to have won, and the bitter may be those investors holding the "Value Investment" book, and the equipment peers whose stock prices are
still in the mud.

So, it's hard not to say that this is a "supernatural miracle" and does not accept the kind of
rebuttal.