Healthcare Author: Siren Chen May 11, 2022 08:04 PM (GMT+8)

ChiNext Board tightened the listing standards and the financial threshold. Can the two companies successfully land on the board?

IPO

The 25th Review Meeting of ChiNext Board Listing Committee in 2022 will be held on May 12. The initial public offering (IPO) applications of Enwei Pharmaceutical Co., Ltd. (Chinese: 恩威医药) and Jiangsu Canopus Wisdom Medical Technology Co., Ltd. (Chinese: 东星医疗) will be reviewed.

Enwei Pharmaceutical is a drugmaker engaged in the R & D, production and sale of Chinese patent medicines and chemical medicines including gynecology, pediatrics and respiratory drugs.

According to the prospectus, from 2019 to 2021, the revenue of Enwei pharmaceutical was CNY 621 million (USD 92.40 million), CNY 634 million and CNY 680 million, respectively, showing a continuous growth trend. The compound growth rate in the recent three years was 3.97%. Meanwhile, the net income attributable to the parent was CNY 83 million, CNY 99 million and CNY 102 million, respectively. Different from the revenue growth, the net profit growth rate declined from 19.56% to 3.03% .

It is worth noting that Enwei pharmaceutical products have been gradually transferred out of the national and provincial health insurance catalog. At the same time, due to the rising raw material prices, the gross profit margin decreased year by year, which was 65.42%, 57.46% and 56.34%, respectively. ShenZhen Stock Exchange (SZSE) also issued the inquiry letter on the continuous decline in gross profit margin.

Canopus Wisdom Medical is a company focused on the development, manufacturing and sales of surgical instruments represented by the surgical stapler.

Canopus’s achieved revenue is CNY 296 million, CNY 374 million and CNY 446 million respectively from 2019 to 2021. The net profits reached CNY 47.37 million, CNY 79.70 million and CNY 110.25 million respectively according to its prospectus.

During the reporting period, the gross profit margin of Canopus was 53.26%, 56.82%, and 57.52%, respectively, which was higher than the average value of its counterparts, as stated by Canopus.  

The surgical stapling devices market is developing rapidly. Giant companies such as Mindray (Chinese:迈瑞医疗), Microport (Chinese:微创医疗) and Lepu medical (Chinese:乐普医疗) have spread their products in the market on a large scale. The competition may be further intensified with other competitive companies emerging.