Valuation of 14 billion! Neural Intervention Track Leader - Minimally Invasive Brain Science IPO

Recently, the Hong Kong IPO market has become lively, and biotechnology stocks are of course indispensable. More importantly, biotechnology stocks have continued to lead the Hong Kong stock market recently, and people's attention to IPO has also begun to rise.

Following minimally invasive medical care, heart pulse medical care, heart through medical care, minimally invasive robots, and minimally invasive electrophysiology, which has already passed the IPO of the Science and Technology Innovation Board, the spin-off minimally invasive brain science will soon be launched on the Hong Kong Stock Exchange.

Minimally Invasive Brain Science (02172) IPO, as of July 8, plans to issue 13.7 million shares, of which Hong Kong offering accounts for 10 %, international placement accounts for 90%, and an additional 15% over-allotment option, the offering price will be HK $24.64 per offering share, 1000 shares per hand, and the shares are expected to start trading on July 15, 2022.

China's largest neurointerventional medical apparatus company

Minimally Invasive is a Chinese company in the neurointerventional medical apparatus industry, dedicated to providing innovative solutions to doctors and patients.

According to the information of Burning Consulting, in terms of sales revenue of neurointerventional medical devices in 2020, the top five players in the Chinese neurovascular medical apparatus market are Medtronic, Stryker, MicroVention, Johnson & Johnson Medical and minimally invasive brain science, accounting for about 91% of the total market share in China in 2020, of which the market share of minimally invasive brain science is about 4% .

Minimally Invasive Brain Science is the only Chinese company among the top five participants.

In 2020, there will be about 15 Chinese enterprises of neurointerventional medical apparatus, which will account for about 7% of the total sales revenue of the Chinese neurointerventional medical apparatus market in terms of ex-factory sales revenue in 2020.

According to the information of Burning Consulting, in 2020, we recorded sales revenue (in terms of ex-factory price) of about 57% of all Chinese developers of neurointerventional medical apparatus, ranking first among all Chinese developers.

As of the Latest Practicable Date, 69 domestically produced neurointerventional medical apparatus had been commercialized.

How is the financial performance?

For the years ended December 31, 2019, 2020 and 2021, the revenue of minimally invasive brain science was RMB 184 million, RMB 222 million and RMB 383 million respectively, and the profit was RMB 47 million, 45.3 million and 24.2 million respectively.

However, Minimally Invasive Brain Science estimates that overall gross margin will decline in 2022, mainly due to changes in product mix.

The acute ischemic stroke product is about to be commercialized, and its gross profit margin is estimated to be lower than that of the hemorrhagic stroke product and the atherosclerotic stenosis product. It is also estimated that the gross profit margin of the hemorrhagic stroke product will decrease due to the increase in sales of the coil embolization system.

In addition, Minimally Invasive Brain Science also estimates that the loss attributable to the joint venture will increase in 2022, and it also estimates that the net profit will decline in 2022, mainly due to the estimated increase in financing costs.

Rapid development of industry

Stroke is the leading cause of death in Chinese patients with high morbidity, accounting for more than 20% of the total mortality in 2020.

In China, the penetration rate of neurointerventional surgery (in the fields of hemorrhagic stroke, atherosclerotic stenosis and acute ischemic stroke) remains relatively low, with a penetration rate of 9.1%, 1.0% and 2.7% respectively in 2020, showing great potential for development.

According to the information of Huoshi Consulting, the scale of China's neurointerventional medical apparatus industry is expected to increase from RMB 5.8 billion in 2020 to RMB 17.5 billion in 2026, with a compound annual growth rate of 20.1%.

In terms of sales revenue at ex-factory price, the market size of neurointerventional medical apparatus for hemorrhagic stroke in China will increase from RMB 2.2 billion in 2015 to RMB 3.8 billion in 2020, with a compound annual growth rate of 11.8%, and is expected to further grow to RMB 8.4 billion in 2030, with a compound annual growth rate of 14.2% from 2020 to 2026.

The world's leading countries in neurointerventional surgery mainly include the United States, Japan, Germany, Brazil, France, Spain and South Korea, of which the United States is the world's largest national market.

Minimally Invasive Medical holds nearly 55% of the shares

Minimally Invasive Medical itself is a listed company, and its companies have made a lot of capital moves in the past two years.

Among them, in November 2021, the minimally invasive medical robot was also split and listed on the Hong Kong Stock Exchange, with an issue price of HK $43.2 and a net raise of HK $1.457 billion.

Minimally Invasive Robot-B soared by 40% in June, and rose by more than 30% again within a few days of this month.

In addition, in April 2022, the minimally invasive electrophysiology meeting was held, and the registration was submitted to the Science and Technology Innovation Board, and it was planned to raise funds 1.01 billion.

In November 2021, Minimally Invasive Brain Science announced that it had completed the formal signing of the $150 million financing agreement as planned, and introduced a number of investors including CICC Capital and Huayi Capital. Belin Capital, which had previously subscribed for the $70 million convertible of Minimally Invasive Brain Science, was converted into shares and co-invested in this round. According to this valuation, it reached $1.75 billion, becoming a leading company in the market value of the neural intervention track, about 14 billion Hong Kong dollars.

Before the IPO, Microinvent Medical held 54.64%, China Microinvent Investment Management held 10.64%, Stride and Strive held 1.96%, HNA held 4.95%, and Nectar Neuro held 2%.

CICC Healthcare holds 4.57%, Biolink Limited 7.38%, Biolink NT 2.95%, HNMP 2.49% and HNNT 2.58%.