Company profile

Mimaitong Technology is the largest online professional physician platform in China. According to Frost Sullivan, there were about 3.5 million registered users on the platform by the end of 2020, of which about 2.4 million users were medical practitioners, accounting for about 58 per cent of all medical practitioners in China in the same period. The company's main sources of income are divided into (1) accurate marketing solutions: medical customers pay fees according to the company's digital push, digital marketing consulting and digital content creation services on the platform. (2) Enterprise solutions: medical customers pay according to digital market research, electronic data acquisition (EDC), CDMS solutions, real-world research (RWS) support solutions, patient recruitment services and related application software development services. By the end of 2020, 81 pharmaceutical and medical equipment companies have used the solutions provided by the platform, of which more than 10 have worked together for more than five years. In the fourth quarter of 2020, the average number of monthly active users of the platform exceeded 1 million, and registered users watched articles and videos on the platform more than 130 million times a month.

Sino-Thai viewpoint

The trend of digital medical marketing in China is improving, there are many participants in the industry, and the competition is highly fierce:

The total medical marketing expenditure of Chinese pharmaceutical and medical equipment companies reached 679.7 billion yuan in 2020 and is expected to reach 991.5 billion yuan in 2025, with a compound annual growth rate of 7.8 percent. The digital medical marketing market accounts for only 2.2% of the total medical marketing market in 2020, and is expected to increase to 11.2% in 2025. The platform of digital medical marketing needs a large and active group of physician users in order to form a strong and effective competitive advantage. in terms of revenue in 2020, the company ranks first among the physician platforms providing digital medical marketing services in China, with a market share of 21.4%. Although the company belongs to the head enterprise in the subdivision of the digital physician platform, the competition among the overall digital medical marketing service providers is highly fierce and scattered, in addition to the physician platform, it also includes Internet hospitals, pharmaceutical e-commerce, online conference providers, virtual access providers, digital solution developers and so on.

Financial analysis: in the fiscal year 2018-2020, the company's total revenue was 83.46 million yuan, 120 million yuan and 210 million yuan respectively, of which the proportion of revenue from precision marketing solutions increased from 63.7% to 73.4%. The number of paid-per-click physicians participating in the platform increased from 228000 to 403000; the number of paid clicks on the platform increased from 1.6 million to 4.8 million. The gross profit margin is 59.8%, 63.5% and 73.2% respectively. According to Frost Sullivan, the efficiency of the company's accurate digital push is 10 times higher than that of the traditional medical representative manual push in terms of each push cost. the net profit rate of returning to the mother showed an increasing trend in the past three years, which was 17%, 25.7% and 39.9% respectively, and the net cash flow from operating activities was 22.09 million yuan, 28.2 million yuan and 110 million yuan respectively. At the end of the year, cash and cash equivalents were $16.53 million, $38.88 million and $150 million respectively.

Industry comparison and valuation level: we selected three data software companies focused on health care: Yidu Technology (2158 HK) Weining Health (300253 CH) and Venture Huikang (300451 CH). The average forecast price-to-earnings ratio in 2021 is about 42.3 times, and the average forecast market sales ratio in 2021 is about 17.3 times. The company's historical price-to-earnings ratio in 2020 is about 162.7-183.6 times, and the historical price-to-sales ratio in 2020 is about 64.9-73.3.The valuation is much higher than the industry average. Based on the 690 million shares after the global public offering, the company's market capitalization is HK $166-18.8 billion.

Sponsor's track record: the price stabilizer is Goldman Sachs Group, who has participated in 11 sponsor projects since the beginning of 2021, with a performance of 7 up, 3 down and 1 flat on the first day.

Cornerstone investors: cornerstone, the introduction of FMR, Fidelity International, Tencent (700HK), GIC, Matthews Funds, Springhill, OrbiMed Funds seven investors, a total subscription of about US $220 million, assuming that the offering price is priced at the upper limit and the over-allotment option has not been exercised, accounting for about 40.48% of the offering shares.

Purchase suggestion: we believe that the overall fundamentals of the company are excellent, and the gross profit margin and net profit margin have been on an upward trend in the past three years. The annual compound growth rate of income in 18-20 years is as high as nearly 60%, but the volume of income is relatively small, reaching only 210 million yuan in 2020. the valuation level is much higher than the industry average. In addition, there are many participants in the overall Chinese digital medical marketing market. In addition to the company's own focused digital physician platform, competitors in the same industry also include Internet hospitals, pharmaceutical e-commerce, online meeting providers and other platforms, with highly scattered and fierce competition. However, considering the introduction of star cornerstone investors such as Tencent and GIC, which is conducive to market confidence, to sum up, it is given 72 points, rated as "purchase".

Fund-raising purpose: assuming that the company does not exercise the over-allotment option in the end and that the offering price is HK $25.65 per offering share, raising about HK $3.77 billion, of which about 40% is used to expand business, including developing and increasing the types of solutions, broadening the customer base, increasing customer loyalty and promoting user growth and participation. About 20% is used for strategic investment or acquisition opportunities; about 10% is used for general corporate purposes and to meet working capital needs.

Risk tips: (1) market competition risk, (2) data protection, privacy and other related legislation regulation