Recently, Jingfeng Medical, a surgical robot company founded by the post-89s generation, submitted a prospectus to the Hong Kong Stock Exchange for listing in Hong Kong.

It is worth mentioning that Jingfeng Medical has a current income of 0, a loss of 79.366 million yuan in 2020, a loss of 349 million yuan in 2021 (including fair value), and an adjusted loss of 39.762 million yuan and 115 million yuan. Why does such a company still have 1.5 billion yuan in cash and can maintain financial stability for 31 months? There is a 12-month buffer period even when the next round of financing starts.

This is because there are a large number of well-known institutions investing in Jingfeng Healthcare, including Temasek, Sequoia, Boyu Capital, Lenovo Star and so on. The total investment is more than 2.1 billion yuan, and in a short period of more than 4 years, the valuation has soared from the newly founded 43 million yuan to 1.507 billion US dollars. This valuation clearly refers to the first minimally invasive robot that has been listed on the Hong Kong stock market. The minimally invasive robot earned 2.15 million yuan last year, made a net loss of 584 million yuan, and now has a market capitalization of $2.76 billion. Intuition surgery (ISRG), the leader of foreign surgical robots, currently has a market capitalization of US $78.8 billion, with an income of US $5.71 billion last year and a net profit of US $1.7 billion.

This is a business that is tens of billions into hundreds of billions.

Surgical robot is a precision manipulating robot that surgeons enter the patient's body through micro-incision under remote control, so as to assist surgeons in minimally invasive surgery.

Therefore, the surgical robot mainly includes the surgical manipulator at the bedside of the patient, the doctor's main console or navigation system, and the imaging system.

Robot-assisted surgery currently accounts for 2.8% of the world's total, and is expected to grow to 14% by 2030. From a global point of view, surgical robots first appeared in 1985, a landmark event is intuitive surgery Leonardo da Vinci surgery system in 2000, approved by the United States FDA, opened the prelude to the rapid development of the industry. Leonardo da Vinci iterated three generations of the system, which was approved again by the US FDA in 2006, 2009 and 2014, respectively. But these are porous endoscopic surgery robots. It was not until 2014 that Leonardo da Vinci's single-hole surgical machine was approved by the FDA.

In terms of classification, surgical robots can be divided into four categories according to clinical applications: endoscope, natural cavity, orthopaedics, and others (including panvascular robot and percutaneous surgery robot, etc.). The largest market segment is endoscopy, because it can be used in urology, gynecology, thoracic surgery and general surgery and other surgical specialties. In 2016-2020 alone, its compound growth rate exceeded 122%, more than double the growth rate of the second orthopaedic department.

In terms of the number of mirror robots installed, Leonardo da Vinci currently has 4005 in the United States, accounting for 61.5% of the world's total, and 240 in China, accounting for 3.7% of the world's total. That is, less than 10% of China's third-class hospitals have Leonardo da Vinci's surgical system. The penetration rate of porous and single-hole robot-assisted endoscopic surgery in the United States is 26 times that in China, one is 13.3%, and the other is only 0.5%.

In the market scale, globally, porous and single-hole endoscopic surgery robots have increased from 18 billion yuan in 2016 to 36.3 billion yuan in 2020, and are expected to increase to 183 billion yuan by 2030, with a compound annual growth rate of 17.6 percent from 2020 to 2030.

It is precisely to see this huge growth space, so Jingfeng Medical has been starting a business along this path since its establishment in 2017. In the second year of the venture, we developed the single-hole endoscopic surgery robot SP1000 and the porous endoscopic surgery robot SP1000, and completed the first animal experiment, which is its most important product.

Split the product structure, as the core product MP1000. It is mainly composed of three parts: doctor console, patient operation platform and three-dimensional high-definition imaging system.

During the operation, the doctor sits behind the main console, watches the surgical field in real time through the three-dimensional high-definition imaging system, and controls the robotic arm to perform the operation.

Based on this, unlike traditional surgery, doctors can operate without entering the sterile area of the operating room. The most important part of MP1000 products is the patient surgery platform. The patient's operation platform is equipped with four robotic arms. The doctor can control the orifice positioning, orifice placement and manipulation of the four manipulators from the main console.

Two of them act as doctors' left hand and right hand respectively, and can install instruments such as surgical scissors, bipolar separation forceps, bipolar grasping forceps, ultrasonic knife and stapler, etc.; the third robotic arm places an endoscope connected with the influence system; the last robotic arm has the flexibility to add other instruments as needed. Patients who started a clinical trial with MP1000 in May last year were enrolled and completed in September and December of the same year. At that time, a total of 104 subjects were enrolled in the study group (52 in the study group and 52 in the control group).

It is worth mentioning that, from various indicators, compared with Leonardo da Vinci Si system, the clinical manifestation of MP1000 is not inferior to the former.

As Intuitive Surgical's fourth-generation da Vinci Xi system and the third-generation Da Vinci Si system are the only products approved by the State Drug Administration, if MP1000 is commercialized, it is expected to compete with intuition's Da Vinci Si and Xi systems in China. As the key product of Jingfeng-SP1000.

The SP1000 is a single-hole endoscopic robot that can also be used for minimally invasive surgery in the natural cavity. The SP1000 has a single robotic arm with all the instruments installed inside and is operated through a cannula. It fills in some advantages that MP1000 does not have.

In terms of competition, the Leonardo da Vinci SP surgery system is currently the only FDA-approved single-hole endoscopic surgery robot in the world, and Q3 has been commercialized in 2018. However, the surgical robot has not yet been approved by the domestic Drug Administration.

Therefore, in the competitive situation of the domestic market, the minimally invasive robot, the single-hole mobile phone robot developed by Shanghai Shu Rui and Jingfeng Medical's SP1000 form a certain competitive relationship. At present, only Jingfeng Medical SP1000 and sharp single-hole endoscope robot have started clinical trials in China, but the application of sharp robot surgery includes not only Jingfeng SP1000 gynecological surgery, but also urology.

In addition to the main endoscopic surgery robot, Jingfeng Medical continues to expand the boundaries of product research and development. In January this year, the company completed the research and design of the first-generation principle prototype of the dual-arm bronchoscope robot, and carried out animal tests. Jingfeng Medical said it plans to start type testing this year and begin registered clinical trials of the robot next year.

While developing endoscopic robot products, Jingfeng Medical is also engaged in the research and development of high-end minimally invasive instruments, including stereoscopic endoscope and intelligent stapler, both of which are suitable for minimally invasive surgery and can be used with single-hole and porous endoscopic robots.

Commercialization and gathering

At present, Jingfeng Medical's production base in Shenzhen has the capacity to produce 80 surgical robots a year, with a total area of 8000 square meters, and will begin trial production in 2019. In order to expand its production capacity, it plans to build a base with an annual production capacity of more than 500 units in Shanghai with a total area of more than 80, 000 square meters.

From the perspective of team background, Jingfeng Medical founder couple Wang Jianchen (33) and Gao Yuanqian (35) are better at research and development. The former won master's and doctoral degrees from Tianjin University in four years after 2013. I also went to MIT to complete an one-year joint doctorate program. The latter also earned master's and doctoral degrees from Tianjin University in the four years after 2013, and went to London University and Harvard Medical School to complete the joint doctoral program. In order to make up for the deficiency of commercialization, Jingfeng Medical poached Chen Zongxi to take charge of the market in January this year. Chen Zongxi spent eight years at Emerson in China, then went to GM China's health care system, and spent 13 years as the Greater China General Manager of CT's business division.

In addition to poaching people, Jingfeng Medical has cooperated with the Urology Branch of the Chinese Medical Association and the top third-class hospitals to establish a training network for major customers. The training targets are mainly surgeons, assistants and operating room nurses. Based on this, of the 391 employees, 219 are R & D personnel, 68 are manufacturing, 63 are management and administration, and the last 41 are sales.

The R & D cost of Jingfeng Medical has also gone up, from 58.67 million yuan in 2020 to 221 million yuan in 2021, accounting for about 80%. As a medical industry, the most noteworthy policy is collection. After all, as early as July 2019, the state promulgated the "Reform Plan for the treatment of High-value Medical consumables", and the impact on other medical industries has been even more obvious in the past two years. It is worth noting that on August 13 this year, Hunan Province announced the results of the selection of centralized purchase of some medical consumables by medical institutions in Hunan Province in 2020.Laparoscopic stapler has been reduced to 1000 yuan in Hunan mining, and the lowest winning price is 338 yuan.

Although under the influence of the collection policy, the clinical penetration rate of domestic endoscopic stapler will be greatly increased. And, due to the uneven product quality of domestic mirror stapler manufacturers, the collection policy may be conducive to industry integration, from which the birth of leading enterprises with strong technical capabilities. However, back to Jingfeng Medical, it is very likely that collection will lead to a decline in its profits.

At the same time, it may also be limited by the national configuration card plan. According to the notice on adjusting the configuration rules of large-scale medical equipment from 2018 to 2020 issued by the National Health Commission, the number of surgical robots will be increased from 154to 225between 2018 and 2020. Therefore, if the configuration quantity is limited in the future, it will have a certain adverse impact on the company's sales volume and revenue scale.

In five years, the valuation soared from 43 million yuan to 1.507 billion US dollars.

In September 2017, when Jingfeng Medical started its business, it received an angel round financing of 5 million yuan from Zhao Kai, which was exchanged for 11.5% equity, with a corresponding valuation of 43 million yuan. Later, Zhao Kai changed his stake to its holding company, Chengdu Mingsheng.

By the end of 2017, seeing the smooth progress of research and development, Shenzhen Zhihui invested 3.06 million yuan at a valuation of 90 million yuan in exchange for 3.4% equity. That is, half a year, the valuation has doubled.

As Jingfeng Medical gradually completed the prototype and the first animal experiment of SP1000 in May 2018, it got the first round A financing, with Zhongheng Huijin and Guangyuan Zhonghe investing 28 million yuan and 2 million yuan respectively; Jiaxing Yuanzi invested 15 million yuan in the second round A financing; and Dongguan Yunji Inc invested 3.3 million yuan in the third round A round financing. The total financing is 48.3 million yuan, corresponding to the valuation of 300 million yuan.

In a year, it tripled. In early 2020, with the completion of the prototype and the first animal experiment of MP1000, and the start of trial production at the same time as SP1000, Jingfeng Medical carried out 65.05 million yuan of A+ round financing, with a corresponding valuation of 605 million yuan. It's equivalent to doubling again in more than a year. This time attracted Lenovo Star, Nanjing Sanzheng and other institutions.

In mid-2020, Jingfeng Medical conducted a pre-round B financing and received 70 million yuan, with a corresponding valuation of 1.337 billion yuan. It doubled in half a year. At the beginning of 2021, it opened the formal round B financing and received 539 million yuan, corresponding to a valuation of 3.939 billion yuan. It tripled in one quarter, attracting CICC Pucheng, Kangji Medical and other institutions. The logic of this round of surge is that the two products complete the type test and meet the relevant technical standards.

At the end of October 2021, Jingfeng Medical completed another cross-round financing of $207 million, corresponding to a valuation of $1.507 billion. It has nearly tripled in eight months. The logic of this round of valuation surge is that in April 2021, its SP1000 entered the green channel for special approval of innovative medical devices by the State Drug Administration, started the clinical trial of MP1000 for gynecological surgery in August 2021, and completed the clinical trial of MP1000 for urology surgery registration in September 2021.

Also before the cross round, Sequoia entered. The etheria Health Fund received US $6.5 million worth of goods from Hangzhou Licheng, and Sequoia Shenzhen received US $6.5 million worth of goods from Hangzhou Licheng. The total investment is $13 million, followed by an additional $18 million.

In fact, the share price of minimally invasive robots has fallen 46% since it went public in November. The market capitalization is 19 billion yuan, which is also lower than the pre-IPO valuation of 22.5 billion yuan.

Therefore, in such a cold market environment, Jingfeng Medical can support the valuation of 1.5 billion US dollars in the end. It remains to be seen.