Lifetech Scientific to Acquire 96.46% Stake in Starway Medical for RMB 1.873 Billion

Source: Device Home

On May 22, 2026, Lifetech Scientific (1302.HK), a Hong Kong Stock Exchange-listed company, announced its plan to acquire approximately 96.46% of Starway Medical Co. Ltd ("Starway Medical") for about RMB 1.8733 billion (approximately USD 274 million). Following the completion of the transaction, Starway Medical will become a non-wholly owned subsidiary of Lifetech Scientific. Based on this calculation, the overall agreed valuation of Starway Medical is approximately RMB 1.942 billion.

This transaction does not involve any cash payment — Lifetech Scientific will issue convertible bonds to the seller as the entire consideration at the time of closing. This means that the acquired party will actually receive convertible bonds rather than cash, and behind the seller is Hillhouse Capital.

According to the announcement, the transaction amount is based on a price-to-earnings ratio of 18 times the unaudited net profit after tax of Starway Medical for the fiscal year ending December 31, 2025, which is approximately RMB 108 million (excluding share-based compensation expenses).

According to the framework agreement, the consideration will be paid by Lifetech Scientific to the seller through the issuance of convertible bonds at the time of closing, and the Company is not required to pay any cash consideration. However, the issuance of convertible bonds and the allotment and issuance of conversion shares are subject to obtaining special authorization at an extraordinary general meeting of shareholders.

According to the framework agreement, both parties must each make reasonable commercial efforts to enter into a formal acquisition agreement for the transaction by June 5, 2026, leaving a time window of only about two weeks for the market.

After penetrating the equity structure, the seller is a limited liability investment holding company registered in Hong Kong, wholly owned by AUT-VII Holdings, whose sole shareholder is AUT-II Holdings Limited, and ultimately wholly owned by Hillhouse Investment Management V, L.P. (Hillhouse Capital).

This means that Hillhouse Capital will not only be the seller but also become a major shareholder of Lifetech Scientific through convertible bonds, potentially leaping to become the largest shareholder of Lifetech Scientific.

Looking back at history, this is Hillhouse Capital's second investment in Lifetech Scientific within six years, following its strategic investment in 2021.

As early as 2023, Lifetech Scientific had sold approximately 22.48% of Starway Medical to Shanghai Lingqie Medical Technology, under Hillhouse Capital, for 500 million yuan, at which time the overall valuation of Starway Medical was about 2.248 billion yuan. Now, Lifetech Scientific is "buying back" approximately 96% of the shares at an overall valuation of 1.942 billion yuan, showing a decrease in valuation compared to three years ago. However, considering changes in the industry environment and the decline in comparable company valuations, this pricing remains reasonable.

After the announcement was released, Lifetech Scientific's stock price experienced almost a one-sided upward trend throughout the day. It opened at HK$2.09, surged to a high of HK$2.32, and finally closed at HK$2.31, with an increase of up to 11.59%, marking its strongest single-day performance in recent times.

Starway Medical Co. Ltd (Starway Medical), established in 2002, is headquartered in Beijing Daxing Biomedical Industry Base. It is a national high-tech enterprise specializing in the research, development, manufacturing, and sales of vascular interventional medical devices. With over two decades of history since its founding, the company is one of the earliest pioneers in the field of congenital heart disease interventional treatment in China.

Starway Medical is currently实际控制 by Hillhouse Capital through its multi-layered shareholding platforms, with a combined shareholding比例接近88.5%, representing a significant布局 in the cardiovascular device sector by Hillhouse Capital. In the 2025 fiscal year, the company achieved a net profit after tax of approximately 108 million RMB, with an overall agreed valuation of about 1.942 billion RMB.

Starway Medical's product line focuses on interventional treatment for congenital heart disease. The company has four core occluder products, all of which have obtained Class III medical device registration certificates from the National Medical Products Administration (NMPA). These products have been clinically implanted in over 220,000 cases, covering more than 600 hospitals across China, and have been exported to over 13 countries and regions, including Southeast Asia, Central Asia, and Latin America.

Lifetech Scientific primarily engages in the development, manufacturing, and sales of interventional medical devices for cardiovascular and peripheral vascular diseases. The Board stated that the acquisition of Starway Medical aligns with the Group's overall development strategy, effectively enhancing the Group’s product portfolio and technical capabilities, particularly filling a crucial gap in the niche market of congenital heart disease interventional treatment.

We believe that Lifetech Scientific has established a strong advantage in the peripheral vascular field, and this acquisition of Starway Medical aims to access the "structural heart disease" sector, creating synergy with its existing product lines. Hillhouse Capital's choice to exit via convertible bonds rather than cash not only reflects continued optimism about Starway Medical’s future value but also sets the stage for potentially increasing its stake in Lifetech Scientific.