The company plans to issue about 206 million shares, including 20.562 million shares for public offering and 185 million shares for international offering, at an offering price of HK $11.1-12.2 per share, or 1000 shares per share, and is expected to be listed on February 4.The company began to sell shares with a market value of about HK $26.2 billion-HK $28.8 billion.

Background introduction

Minimally invasive Xintong Medical, originally a subsidiary of minimally invasive Medical, split it into a separate stock market in November 2020. Minimally invasive Xintong specializes in the treatment of valvular heart disease equipment companies, mainly covering aortic valve, mitral valve, tricuspid valve, surgical valve and surgical supporting products.At present, the products developed by the company have high barriers, belong to the immune track of collecting consumables, and are not affected by policies and other negative news.

VitaFlow series products have high certainty, and there is great uncertainty in bicuspid and tricuspid valve products.At present, the company's core products are VitaFlowTM and VitaFlow II products, which belong to the field of TAVR/TAVI. VitaFlowTM was approved for listing in July 2019, while VitaFlow II was accepted by the FDA in November 2020 and is expected to be registered in China by the end of 2021. At present, the company's bicuspid and tricuspid valves are in the preclinical stage, and the products are extremely difficult. at present, there are no domestic products on the market, and there is only one imported mitral valve on the market. (note: TAVR=TAVI, generally referring to similar operations)

The bottleneck of domestic TAVR surgery lies in the production capacity of doctors.

From the moment of birth, the human heart beats 60-100 times per minute. As you get older, the more the heart beats accumulatively, the more times the heart valve opens and closes, and it is prone to problems, which explains why older people are more likely to suffer from heart disease.

Valvular heart disease mainly includes stenosis and insufficiency, which affect the normal flow of blood flow, resulting in cardiac dysfunction, and eventually lead to heart failure. There are as many as 4 million patients with valvular heart disease in China, and heart disease is the leading cause of death in China.

TAVI interventional surgery is a minimally invasive operation, which has the advantages of small wound, short recovery time and low risk of operation, especially suitable for the elderly over 75 years old.Traditional surgery such as thoracotomy on the right and TAVI trauma on the left. The operation time of TAVI is 1-2 hours, while that of thoracotomy is often 3-6 hours. According to the Frost Sullivan report, more than 3.9 million patients in China need valvular surgery each year, and the number is expected to reach 4.4 million by 2025. Only about 2400 TAVI operations were performed in China in 2019, accounting for only 0.3 per cent of eligible patients.

The following is a video of TAVR intervention:

In the countryAlthough the TAVI market is still in short supply, the bottleneck does not lie in the manufacturers, but in the doctors.An TAVI operation requires 2-3 interventional physicians, 1-2 cardiac surgeons, 1 anesthesiologist, 1 echocardiologist, 2-3 nurses and so on. Doctors need to perform 20-30 TAVI operations as a learning curve. Although 604 hospitals in China comply with TAVI surgery in 2019, only 156 hospitals perform TAVI surgery, and the top 20 hospitals play an important role in the market.

It is expected that the market share of Mini Chuangxintong VitaFlowTM series will be the first in China from 2021.

At present, China is in the situation of "3 domestic + 1 import".The domestic TAVR market has formed a pattern of 3 domestic (Qiming Medical, Jiecheng Medical, minimally invasive Xintong) + 1 import (Edward). Imported product Edward's SAPIEN 3 is the first imported TAVI product in China, and its competitive advantage is not obvious at home. The one-year mortality rate is on the high side, and the imported products may not conform to the human structure of the Chinese people. Jiecheng Medical is the only domestic TAVR product with expanded valve through apical intervention, but it has been proved by evidence-based medicine that the effect of apical intervention is not good. At present, Jiecheng Medical Business is in crisis and is besieged with lawsuits.Therefore, at present, the main competitor of Mini Chuang Xintong is Qiming Medical.

VitaFlowTMFirst generation TAVIProducts:It has obvious advantages in safety and price.

VitaFlowTM, the first generation TAVI product independently developed by MICR (shown below), was approved by the State Drug Administration in July 2019 and then commercialized in China in August 2019. It is worth mentioning that VitaFlowTM products have been added very creatively.The electric conveying system is designed to help doctors overcome the challenge of performing TAVI surgery, which greatly shortens the doctor's learning curve.

Minimally invasive Xintong VitaFlow has obvious advantages in security and price.VitaFlow is a self-expanding bovine pericardial valve, which was approved by NMPA in July 2019. According to the available data, the all-cause mortality at 30 days and 1 year after operation was 0.9% and 2.7%, respectively. The safety data were excellent, and the cardiac function of the patients was significantly improved. In addition, the price of Qiming medical treatment is 248000, while the price of minimally invasive Xintong is 196000, which is 20% lower.The company indicated in the prospectus that with VitaFlowTM's competitive price advantage, it is expected to become one of the first TAVI products to be included in China's medical insurance reimbursement catalogue.

TAVRSurgery is far from being satisfied in China.Estimated 2021年The sales of Mini Chuangxintong VitaFlowTM began to surpass that of Qiming Medical.。Micro-Chuangxintong VitaFlowTM will not be listed until July 2019, while Qiming Medical's VenusA-Value will be listed in 2017. With the channel, product advantage and price advantage of the leading minimally invasive medical companies in the field of minimally invasive surgery in China, VitaFlowTM sales have quickly entered domestic hospitals. The company said on a conference call in November 2020"at the end of 2020, the monthly implantation amount of VitaFlow exceeded that of its competitors (that is, Qiming Medical), and the annual data of 2021 won the first place in the market."

The second Generation TAVI products of VitaFlow Ⅱ: it is expected to open the bottleneck of doctors' productivity.

Minimally invasive Xintong's VitaFlow Ⅱ is a second-generation TAVI product with recyclable functions. The product was accepted by the State Drug Administration in November 2020 and is expected to complete VitaFlowTM II registration in China by the end of 2021. In all TAVI productsVitaFlowTMII is the only product with electric conveying system.It is also the only TAVI product developed in China that is clinically tested or commercialized in Europe.。

At present, the second generation of TAVI products in China is only Qiming Medical's VenusA-Plus, and the product was approved to be listed on November 15, 2020. The second generation of TAVI has the advantages of recyclable and pre-installed valves, which greatly reduces the risk of doctor failure. The VitaFlow Ⅱ of minimally invasive Xintong has been accepted by the FDA and is expected to be approved for listing by the end of 2021 / early 2022. VitaFlow Ⅱ also has the advantage of recyclable and pre-installed valves, and has one more electric delivery system than Qiming Medical, which is expected to quickly open the bottleneck of doctors' production capacity.

It is expected that the share price of WeChuangxintong is about4% Mel 34% room for growth

Reasonable valuation of minimally invasive Xintong: Qiming Medical (37.2 billion) > minimally invasive Xintong > Peijia Medical (18.2 billion).According to the company's business line, we select three listed companies with TAVI products for comparison. Peijia Medical's first-generation TAVI products are expected to be approved for market this year, Qiming Medical's first-generation and second-generation products have been approved to market, and minimally invasive Xintong is only the first generation of products on the market.

Although the first generation of minimally invasive Xintong products are superior to Qiming Medical in terms of effect and price, the effect and doctor production capacity of the second generation TAVR products are still much better than those of the first generation products. Therefore, in 2021, the reasonable valuation of Mini Chuang Xintong is Kai Ming Medical (37.2 billion) > Mini Chuang Xintong > Peijia Medical (18.2 billion). It is estimated that the reasonable valuation of Micro Chuangxintong is about HK $30 billion-HK $35 billion.At present, the market value of the company's IPO is between HK $26.2 billion and HK $28.8 billion, and the share price after listing is about 4% of the room for 34% growth. CICC estimates that after the listing, the share price of Micro Chuangchuangxintong will grow by about 7% and 48%.

Summary

1) at present, China's TAVI field is "3 domestic + 1 import" situation, the competition is not fierce, the main bottleneck is the production capacity of doctors. Limited by the production capacity of doctors and the number of manufacturers of TAVI surgery, it is expected that the energy of TAVR products to be collected in the country will be very low within 5 years.

2) according to the company's prospectus, VitaFlow is expected to be one of the first TAVI products to be included in China's health insurance catalogue. Micro-Chuangxintong VitaFlow series products have obvious advantages in safety and price. It is estimated that the reasonable valuation of minimally invasive Xintong in 2021 is as follows: Qiming Medical Care > minimally invasive Xintong > Peijia Medical.