Why does bright eye shareholders of Xinmai medical news reduce their holdings by 7.27percent?

category:Finance
 Why does bright eye shareholders of Xinmai medical news reduce their holdings by 7.27percent?


It was once seven times higher than the issue price

In July 2019, Xinmai Medical Co., Ltd. was listed, with the issuing price of 46.23 yuan / share, and the corresponding P / E ratio was 36.71 times. On July 1, 2020, the stock price of Xinmai medical once rose to 373.8 yuan, more than seven times higher than the issue price. According to the public data, CMA is mainly engaged in the R & D, production and sales of aortic and peripheral vascular interventional medical devices, and the main product in this field is aortic covered stent system.

Xinmai medical announced after the closing on the afternoon of August 6, because of their own capital needs, shareholders Shanghai Lianmu and Honghao investment plan to reduce their holdings by no more than 2519200 shares and 1764000 shares respectively by means of centralized bidding and block trading from August 28, 2020 to February 24, 2021, i.e., no more than 3.5% and 2.45% of the companys total share capital; Shanghai fufu plans to reduce its holdings from August 28, 2020 to February 24, 2021 During January 27, through centralized bidding and block trading, no more than 948000 shares were reduced, that is, no more than 1.32% of the total share capital.

These pre IPO investors announced a big reduction in their holdings. On August 7, Xinmai medical fell 5.65%, and minimally invasive medical also fell 3.1%.

A well-known fund manager in Shenzhen told the first finance and economics reporter that for this kind of investment institution which acquired equity before listing, the cost is far lower than the issue price. At present, a large floating profit has been accumulated, and it is normal to reduce the holding. In the medium and long term, due to the certainty of aging expectations, it is expected that the overall valuation of the biomedical industry can be maintained at a high level, and the performance growth of leading enterprises can gradually digest the higher valuation.

Net profit is expected to increase by 40% in the first half of the year

Xinmai medical said that due to the impact of the new crown epidemic, in the first quarter of the year, due to the implementation of strict prevention and control measures for the new crown epidemic in all parts of the country, the operation of medical institutions was greatly restricted, so it had a certain impact on business development. In the second quarter, with the improvement of domestic epidemic situation, the operation of medical institutions gradually returned to normal, business also returned to normal, and the sales revenue recovered a good growth trend.

Yuan Wei, an analyst at Guojin securities, said that the steady increase in the detection rate and treatment rate of aortic diseases, the gradual promotion of domestic substitution and the large market space for peripheral intervention are the core driving forces driving the long-term performance improvement of cardiac pulse medical. Cardiovascular medicine is the leader of domestic aortic intervention, which is expected to benefit from domestic replacement bonus. In addition, the distribution of cardiovascular medicine has been accelerated, and the peripheral treatment product line has been improved. It is expected to form a product layout of core treatment pill + surgical accessories, which can be expected in the future.

According to the companys prospectus, according to the relevant research report of frost Sullivan company, according to the surgical volume ranking of product application, the market share of cardiovascular medicine in Chinas aortic vascular interventional medical devices ranked second in 2018 (the company ranked first was Medtronic), and the market share of domestic brands ranked first. According to the calculation of the operation volume of the product application, the market share of aortic stent products in cardiovascular medical treatment will be about 26% in 2018.

Why is the parent company in advance of loss?

According to the profit warning announcement of minimally invasive medical, it is estimated that a net loss of about $65 million to $70 million will be recorded in the first half of 2020. The main reasons for the change from profit to loss include: due to the impact of the epidemic, the number of outpatients and surgeries in medical institutions decreased sharply, resulting in the decrease in sales revenue of implantable devices such as cardiovascular intervention, heart rhythm management and orthopedics in the first half of the year.

In addition, according to the share award plan, the cost of granting incentive stock to several employees, including an executive director, was incurred; during the reporting period, there was no one-time investment income obtained by disposing part of the equity of Shanghai minimally invasive electrophysiology Medical Technology Co., Ltd. in the same period of 2019.

Minimally invasive medical also said that it holds 46.34% of the equity of Xinmai medical, and the companys performance and financial statements of minimally invasive medical are comprehensively recorded (consolidated statements are required).

According to the net profit attributable to shareholders of Xinmai Medical Co., Ltd. of RMB 121 million in 2019 and the net profit attributable to shareholders of minimally invasive medical in 2019 of US $46.281 million, with the shareholding ratio of 46.34%, Xinmai medical contributed nearly 18% of the net profit to the shareholders in 2019; at present, their P / b ratios are 17.52 times and 18.46 times, respectively.

How to divide business with parent company

According to the public information, minimally invasive medicine focuses on innovation, manufacturing and sales of high-end medical devices worldwide. Pulse medical is a part of minimally invasive medical business, inheriting assets, personnel and R & D achievements of minimally invasive medical related businesses.

In the prospectus, about the development of the situation, pulse medical also made an explanation. Before the establishment of Xinmai Co., Ltd., the predecessor of cardiac pulse medicine, the R & D, production and sales of aortic and peripheral vascular interventional medical devices were managed and operated as an independent business line in Shanghai minimally invasive medical, a wholly-owned subsidiary of minimally invasive medicine. In August 2012, Xinmai Co., Ltd. was established as an independent business entity of minimally invasive medical subordinates engaged in aortic and peripheral vascular interventional medical device business. Xinmai Co., Ltd. has successively transferred all operating assets, intellectual property rights and non patent technologies owned by Shanghai minimally invasive medical subsidiary, and has undertaken relevant personnel. After the completion of the above business restructuring, CMA is completely independent from minimally invasive medicine in terms of business, assets, R & D and personnel. The research and development achievements related to aortic and peripheral vascular interventional medical device business have been transferred completely. Source: editor in charge of Finance and Economics: Zhong Qiming_ NF5619

In the prospectus, about the development of the situation, pulse medical also made an explanation. Before the establishment of Xinmai Co., Ltd., the predecessor of cardiac pulse medicine, the R & D, production and sales of aortic and peripheral vascular interventional medical devices were managed and operated as an independent business line in Shanghai minimally invasive medical, a wholly-owned subsidiary of minimally invasive medicine.

In August 2012, Xinmai Co., Ltd. was established as an independent business entity of minimally invasive medical subordinates engaged in aortic and peripheral vascular interventional medical device business. Xinmai Co., Ltd. has successively transferred all operating assets, intellectual property rights and non patent technologies owned by Shanghai minimally invasive medical subsidiary, and has undertaken relevant personnel. After the completion of the above business restructuring, CMA is completely independent from minimally invasive medicine in terms of business, assets, R & D and personnel. The research and development achievements related to aortic and peripheral vascular interventional medical device business have been transferred completely.