On December 3, according to the Star Market Daily (Reporter Zheng Bingxun), a notice to pay supplementary taxes caused a drop of nearly 7% in the stock price of leading aortic intervention company shanghai microport endovascular medtech(group)co.,ltd. (688016.SH) in early trading today, followed by a rebound. As of the afternoon closing, the stock price of shanghai microport endovascular medtech(group)co.,ltd. fell by 2.97% to 103 yuan per share.

shanghai microport endovascular medtech(group)co.,ltd. revealed that due to the company's failure to submit annual development reports in 2021 and 2022, the Shanghai High-tech Enterprise Certification Guidance Group recently canceled the high-tech enterprise qualifications starting from 2023, and the company has received a "Tax Matters Notice" from the Second Tax Office of Pudong New Area, demanding the repayment of enjoyed tax incentives since 2023 and payment of overdue fines.

A reporter from the Star Market Daily asked personnel from shanghai microport endovascular medtech(group)co.,ltd. about the latest developments regarding this matter, but they refused to be interviewed citing inconvenience.

Will the expected growth in net income for the full year be "neutralized"?

According to preliminary calculations by shanghai microport endovascular medtech(group)co.,ltd., the total amount of taxes and overdue fines to be paid is about 60-70 million yuan, with an expected impact on net income of more than 10% of the most recent audited net income of the company for the fiscal year.

Data shows that shanghai microport endovascular medtech(group)co.,ltd. had a net income attributable to the parent company of 0.492 billion yuan in full year 2023 and 0.553 billion yuan in the first three quarters of 2024.

Notably, in the third quarter of this year, shanghai microport endovascular medtech(group)co.,ltd. received an inquiry letter from the National Healthcare Security Administration due to suspected overpricing issues with its product, the "Castor Thoracic Aortic Membrane Stent and Delivery System."

In the latest financial report, shanghai microport endovascular medtech(group)co.,ltd. revealed that the price of thoracic aortic endovascular stent products has decreased by around 40% or more, while the terminal price of abdominal aortic endovascular stent products has also been reduced by around 20%-35%. Excluding the impact of non-operating risk factors, it is expected that the net income attributable to the parent company will grow by around 0-10% in 2024.

This means that if the tax subsidy measures are implemented, the full-year expected net income growth of shanghai microport endovascular medtech(group)co.,ltd. in 2024 may be 'offset'.

The 'Science and Technology Innovation Board Daily' journalists queried the 'Announcement on the Cancellation of the Qualification of High-tech Enterprises in Shanghai in the Second Batch of 2024' issued by the Shanghai High-tech Enterprise Recognition Guidance Group in August this year. They found that there are 271 companies listed together with shanghai microport endovascular medtech(group)co.,ltd., among which, over 220 companies have had their qualifications revoked due to not submitting annual development status reports for two consecutive years.

In response to the cancellation of high-tech enterprise qualifications, shanghai microport endovascular medtech(group)co.,ltd. believes that the company does not have any circumstances that do not meet the substantive conditions for high-tech enterprise recognition under the 'Administrative Measures for the Recognition of High-tech Enterprises'. The company has submitted a written objection on the matter and continues to communicate with the Shanghai Science and Technology Commission and the Second Taxation Office of Pudong New Area.

shanghai microport endovascular medtech(group)co.,ltd. also revealed that in October of this year, the Shanghai High-tech Enterprise Recognition Office issued a 'Notice on the Publication of the Second Batch of Proposed High-tech Enterprises to be Recognized in Shanghai in 2024', and shanghai microport endovascular medtech(group)co.,ltd. is included in the list and is currently in the recordation process.

In fact, journalists from the 'Science and Technology Innovation Board Daily' found that shanghai microport endovascular medtech(group)co.,ltd. obtained high-tech enterprise certificates with the numbers GR201831001199 and GR202131002383 in 2018 and 2021 respectively, with a validity period of three years. The certificates are set to expire on November 17, 2024, and the 2024 mid-year review is in progress.

When asked by journalists from the 'Science and Technology Innovation Board Daily' about the latest progress in communication with shanghai microport endovascular medtech(group)co.,ltd. employees and whether the previous failure to submit annual reports was due to certificates still being valid, the other party stated that they 'cannot reply'.

Records show that shanghai microport endovascular medtech(group)co.,ltd. won the 'National Science and Technology Progress Award' in 2017 and was re-evaluated in 2022 as a 'National Specialized, Special, and New "Little Giant" Enterprise'. The Castor product also won the National Single Champion Product in 2021.

shanghai microport endovascular medtech(group)co.,ltd. has now listed 27 products globally, with 20 of them independently developed. Among the products that have been listed or are under development, 8 have been approved to enter the national innovative medical instruments approval "green channel." Globally, more than 0.33 million patients with aortic and peripheral vascular diseases have been treated with shanghai microport endovascular medtech(group)co.,ltd. products.

Renowned economist Pan Helin told the Star Daily reporter, "Companies need to hire some professionals for financial and tax issues, make good use of policy preferences, and avoid the impact of tax payments on the market's perception of listed companies."