Huichuang Medical Secures Nearly RMB 1 Billion in Series B+ Financing to Advance Brain Science 'New Quality Productive Forces' Platform

Recently,Danyang Huichuang Medical Equipment Co., Ltd. (hereinafter referred to as "Huichuang Medical," "the Company") has completed a nearly 100-million-yuan B+ round of financing,This is the second hundred-million-level financing the company has received within half a year.This round of financing was jointly led by Xingfu Capital and Shengjing Jicheng.The financing will be used to strengthen the leading brand advantage of Danyang Huichuang Medical Equipment Co., Ltd. in the near-infrared (fNIRS) brain function imaging market, as well as to support clinical trials for transcranial light modulation therapy in degenerative diseases and the recruitment and construction of the team.Changhai Capital continues to serve as the exclusive financial advisor for the company's financing.

Brain science has been a hot topic in the Chinese and foreign capital markets over the past 2-3 years, from the invasive brain-computer interface platform Neuralink gaining repeated favor in the capital market, to MIT Professor Li-Huei Tsai’s publication of several groundbreaking studies on clearing Alzheimer's Aβ protein, and the proposal and official implementation of China's "Brain Project," which has sparked a "whirlwind" of financing in the brain science field in China. According to incomplete statistics, dozens of companies related to the brain science field in China have received financing between 2022 and 2024.

Brain science has always been a significant frontier academic issue. The understanding of learning, memory, behavior, perception, and consciousness on a biological basis was described by Eric Kandel, a Nobel Prize winner in Physiology or Medicine, as the "ultimate challenge" in biological sciences. As a discipline with high initial investment, high barriers, and slow revenue realization, brain science projects that have not yet entered the industrial transformation and industry application stage are finding it increasingly difficult to gain support from the capital market amid the tightening of the capital market environment. Huichuang Medical has consistently focused on the transformation from academic research to market industry, standing at the forefront of academic research while emphasizing the commercialization and marketization of its products, truly realizing the concept of "writing research onto the vast land of our country." In recent years, Huichuang Medical's revenue scale has continued to rise against the trend, maintaining nearly 100% growth for several consecutive years, delivering an impressive performance in the productization, industrialization, and marketization of cutting-edge academic research results.

As the leading project of technology transfer from the Beihang (Danyang) Research Institute and a high-tech enterprise nurtured in Danyang, Huichuang Medical has rooted itself in Danyang and expanded its vision globally, becoming a typical representative of China's "new quality productive forces," benefiting from the long-term support of the government, universities, and science parks. In recent years, Huichuang Medical and its team members have received numerous honors, including the highest scientific and technological award in the field of biomedical engineering in China, the "Huang Jiashi Biomedical Engineering Award," Jiangsu Province’s First Domestic Major Equipment recognition, the "Top Ten Technological Innovation Achievements by Jiangsu Employees," the "Jiangsu May 1 Labor Medal," and the title of "Specialized, Precise, Unique, and Innovative Enterprise" in Jiangsu Province. These achievements are inseparable from the emphasis on technological innovation by leaders at all levels of Jiangsu Province, Zhenjiang City, and Danyang City, as well as their care and support for Huichuang Medical.

The Secretary of the Danyang Municipal Party Committee stated: Danyang City has always attached importance to scientific and technological innovation and the transformation of achievements. Eight years ago, Huichuang Medical, relying on the Beihang Danyang Research Institute, took root under the attraction of a new mechanism for innovation and entrepreneurship that promotes industry-university-research transformation. After more than eight years of technological research, Huichuang Medical has achieved fruitful results in multiple dimensions such as academic research, clinical utility, industrial transformation, and capital value. Huichuang Medical has consistently adhered to independent innovation and active research efforts, focusing on cutting-edge academic issues in brain science, major engineering problems in brain imaging instruments, and significant clinical issues in the diagnosis and treatment of brain diseases. It has successfully developed world-leading multi-channel near-infrared brain imaging equipment, providing innovative advanced products for the industrial community, research tools and methods for brain science innovation in academia, and innovative brain activity diagnosis and treatment solutions for clinical medicine. Its work has been widely recognized and applied in multiple fields such as engineering, science, and clinical practice.

Recently, Huichuang Medical completed a nearly 100-million-yuan B+ round of financing, jointly led by Xingfu Investment and Shengjing Jicheng Investment. The aim is to further increase new technology research and development and new product development in the brain health field, enhance the company's technological R&D advantages and comprehensive competitiveness, and support Danyang in strengthening, supplementing, and extending the industrial chain around the broader health industry, particularly the brain health industry, accelerating the development of new quality productive forces.

In the future, the Danyang Municipal Committee will continue to implement the new development philosophy and build a new development pattern, further supporting Huichuang Medical in the innovative research and development of a new generation of revolutionary brain diagnosis and treatment products. With Huichuang Medical at its core, it will establish a collaborative innovation and joint research and development center for high-end medical equipment in brain science, aiming to build Danyang into a global highland for brain science research and a global hub for brain imaging industry. It will transform innovation momentum and platforms into developmental energy, firmly implementing the important speech spirit of General Secretary Xi Jinping on "integrating scientific and technological innovation resources, leading the development of strategic emerging industries and future industries, and accelerating the formation of new quality productive forces." Focusing on the present while looking toward the future, it aims to accumulate strength and empower the development of new quality productive forces.

fNIRS Functional Brain Imaging Device: The "Portable fMRI on the Head"The fNIRS functional brain imaging device, known as the "portable fMRI on the head," has gained rapid attention in both research and clinical settings in recent years due to its non-invasive, portable, and accurate performance advantages. According to statistics from Google Scholar, there are currently over 5,000 publications related to fNIRS annually worldwide. Prestigious institutions such as Harvard Medical School, Stanford University, Mayo Clinic, and the University of Tokyo have published a large number of high-impact articles. Clinically, fNIRS applications in China now cover thousands of tertiary hospitals and are widely used in departments such as psychiatry, rehabilitation, neurology, and pediatrics. It shows great potential as a next-generation biomarker for detecting and evaluating rehabilitation in diseases like depression, autism, cognitive impairment, and stroke recovery.

In addition to the currently relatively mature diagnostic paradigms, fNIRS is also a clinical and multi-field potential application tool with great imagination:

● Clinical Fields: Support brain function solutions across multiple departments and fields such as cognition, rehabilitation, emotion, psychiatry, obstetrics and gynecology, ENT, audiology, and ophthalmology. Facilitate the development of brain disease and brain function examinations, widely applied in auxiliary disease assessment, early disease screening, prognosis evaluation, efficacy prediction, real-time treatment feedback, and optimization of diagnosis and treatment plans.

● Education and Sports: Explore the brain development rules of individual learning and training, assist in identifying learning and training styles, monitoring mental states, and enhancing training effectiveness and competitive levels; assist in optimizing the evaluation of teaching and training quality and measuring teaching outcomes.

● Industrial Safety Field: Explore the real-time monitoring of mental and psychological states to drive key industrial processes, optimize job matching, scientifically schedule project timelines, and promptly identify abnormalities in personnel health. Provide new industrial safety solutions for scenarios with extremely high safety standards, such as power grids, hazardous chemical transportation, and fleet logistics.

● Cultural Entertainment Field: Through the interactive solutions of fNIRS technology, combined with the metaverse, virtual reality, and augmented reality, it promotes brain-state-based interactive control and user-state perception, enhancing user immersion.

● Aging Health and Wellness Field: Timely alerts on brain health, brain load, brain cognition, and brain fatigue to enable early warnings and interventions for abnormal mental health and vital sign anomalies. Utilizing brain-computer interface technology for early screening and intervention of key physiological functions in the elderly, promoting the maintenance, recovery, or enhancement of related functions.

Figure: The application prospects of fNIRS in fields such as neuromodulation and brain-computer interfaces, Wang Daifa et al., Functional near-infrared spectroscopy in non-invasive neuromodulation. Neural Regeneration Research, 19(7), 1517-1522.

Moreover, in the field of brain-computer interfaces (BCIs), non-invasive BCIs based on fNIRS technology exhibit significant advantages over other types of BCIs. These include ease of installation and debugging, good physiological response stability, high spatial resolution, strong resistance to electromagnetic interference, strong resistance to motion interference, and convenient and comfortable wearability. This makes fNIRS an ideal interactive interface and solution for brain-computer interfaces and brain-inspired intelligent technologies. It holds broad application potential in areas such as motor imagery BCIs and cognitive BCIs.

Innovation Leads: Huichuang Medical has always adhered to innovation-driven leadership, consistently investing heavily in research and development. The company has established a sizable R&D team, continuously guiding industry-university-research directions with an innovative and efficient R&D system. Through years of accumulated R&D efforts, the company has been transforming cutting-edge academic achievements into advanced engineering results and innovative market products. The company independently developedWorld's FirstObtained Medical Device CertificateOver 100 ChannelsFloor-standing Near-infrared Brain Function Imaging Device,World's FirstObtained Medical Device CertificatePortableNear-infrared brain function imaging equipment and the worldThe Highest Channel to Obtain China Medical Device Registration CertificateInfrared Brain Function Imaging Equipment. Since its launch, the product has won the highest scientific and technology award in the field of biomedical engineering in China, the "Huang Jiashi Biomedical Engineering Award," been recognized as the first major equipment set in Jiangsu Province, and entered the directory of new technologies and products promoted by Jiangsu Province.

Academic Traction: Huichuang Medical has always adhered to an academically-driven strategy. The company's innovative fNIRS products have provided the academic research community and clinical medicine field with new research tools, created new research methods, and opened up new areas of study. As of the end of March 2024, Huichuang Medical’s fNIRS series has supported expert users in publishing 241 SCI papers in top-tier journals such as *Nature Human Behaviour*, *Advanced Functional Materials*, *NeuroImage*, *Cerebral Cortex*, and *Asian Journal of Psychiatry*. This marks an increase of over 50% compared to September 2023 when the company completed its Series B financing. On average, every 1-2 days, a high-level SCI paper based on Huichuang Medical’s fNIRS products is published.

Industry Promotion: Huichuang Medical, with its abundant achievements throughout the "industry-academia-research-clinical" process, has not only undertaken several key national and provincial projects—including three National Key R&D Programs and one key R&D project in Jiangsu Province—but also effectively promoted the implementation of China's first "Expert Consensus on Clinical Application of Near-Infrared Brain Imaging." Additionally, as the only corporate drafting entity, the company collaborated with the National Medical Products Administration to formulate China’s first mandatory national standard for fNIRS.

Market-Oriented: In terms of sales and operational systems, the Huichuang Medical team has continuously optimized and grown. Currently, a comprehensive sales system covering medical institutions and scientific research institutes at all levels across China has been established, with sales coverage extended to overseas regions such as Southeast Asia. The fNIRS devices from Huichuang Medical have been sold and demonstrated in clinical departments of leading hospitals such as the Sixth Hospital of Peking University, Peking Union Medical College Hospital, Shanghai Ruijin Hospital, and Sichuan Huaxi Hospital, as well as in renowned universities and institutes like Tsinghua University, Beijing Normal University, and the Chinese Academy of Sciences, reaching over a thousand client organizations. Many benchmark customers have already made repeat purchases. In the first half of 2024, despite an increasingly complex market environment, the company still achieved a strong start in sales.

Capital Support: The company has successively received support from several top investment institutions, including ClearSource Investment, CAS Hicreate, Daoyuan Capital, Mountain Blue Capital, Founder Securities Investment, Yida Capital, Wuxi Venture Capital, Hetang Venture Capital, and Hemeng Venture Capital, and has received multiple rounds of follow-up investments from various institutions.

On May 10, 2024, China's leading indicator for the private equity investment industry – CVSource unveiled the "CVSource 2023 Annual List". Huichuang Medical was awarded the Top 10 Best Investment Cases in the China Medical and Health Services Industry's Medical Device Sector for the year 2023 by CVSource.

Figure: Top 10 Best Medical Device Investment Cases of 2023 by VCBeat: Huichuang Medical

Huichuang Medical has consistently adhered to a technology-oriented and talent-oriented approach, committing itself to building an innovative, knowledge-based, and learning-focused organization. The chairman, Associate Professor Wang Daifa of Beihang University, completed his undergraduate to doctoral studies at Tsinghua University and has dedicated 20 years to research and exploration in the field of brain science, establishing a solid technical foundation for the company's products. The general manager, Mr. Guo Genmiao, is a former executive and chief engineer of Mindray, with extensive experience in production and sales system development, enterprise management, and industry mergers and acquisitions. The company currently has a team of nearly 200 people, with over 30% holding master's or doctoral degrees, most of whom graduated from renowned universities both domestically and internationally, such as Tsinghua University, Peking University, California Institute of Technology, University of Science and Technology of China, and Beihang University.

Speaking of the company's development, General Manager Guo Genmiao said that Huichuang Medical is a representative enterprise of "new quality productivity" incubated by the combination of professors' scientific achievements and industrial experience in China, with a close integration of industry, academia, and research. The company always adheres to efficient self-developed innovation and guides its operational development with advanced industrial management concepts, steadily moving towards becoming a leading enterprise in China's brain science field.

In July 2023, Eisai Co., Ltd. and Biogen Inc. launched Lecanemab, the first new Alzheimer's disease (AD) drug to receive full FDA approval in 20 years, bringing new hope to this long-stagnant field. The drug slows the rate of cognitive decline in patients by clearing excess Aβ protein plaques in the brain. Although the introduction of this new therapy is exciting, it can only slow disease progression, requires a long treatment course, and offers relatively limited improvement and efficacy. For China’s over 10 million AD patients, 35 million high-risk individuals, and 173 million potentially at-risk individuals, the development of more groundbreaking interventions and treatment methods is imperative.

Huichuang Medical applied for the earliest principle patent in China for the treatment of degenerative diseases using near-infrared light as early as 2019, and proactively conducted extensive foundational validation and research in the early stages of the industry. Recently, Huichuang Medical's phototherapy AD product has made clear progress: dozens of patient research clinical trials have been completed.The product has received special review (Green Channel) as a national innovative medical device.

Ding Yu, Partner of Xingfu CapitalRepresentation: The field of brain science is a key research track for Xingfu Capital in the direction of medical hard technology. Near-infrared functional brain imaging (fNIRS) technology, due to its advantages such as being non-invasive, having strong anti-interference capabilities, and unrestricted usage scenarios, has become a hot technology for clinical brain function disease evaluation and fundamental brain science research. fNIRS has a wide range of clinical application scenarios and great value. Huichuang Medical has significant leading advantages in both scientific research and clinical applications and is a leader in China’s niche market. The next step is that Xingfu Capital will support Huichuang Medical in conducting large cohort population brain function mapping clinical research, bringing fNIRS into the digital and intelligent era, while also promoting the company's optogenetic treatment products into clinical research, benefiting AD patients worldwide at an early date.

Shengjing Jia Cheng Partner Wang XiaohuiRepresentation: The diagnosis and treatment of brain diseases are one of the "two wings" of China's Brain Project. China has a large population of patients with brain functional disorders, and the market demand for diagnosis and treatment of these conditions is enormous. However, there is a lack of quantitative detection tools, prognostic monitoring, and closed-loop neurofeedback systems in clinical practice. Huichuang Medical focuses on fNIRS, which can monitor brain functional activity in real time, providing doctors with precise diagnostic and evaluation criteria. It has already been applied across multiple departments, including psychiatry, rehabilitation, pediatrics, and neurology, establishing its position as a commercial "leader." Additionally, the company’s ongoing research into AD phototherapy products is promising, with key mechanisms of action becoming increasingly clear, potentially offering an important method for AD treatment. We believe that as pioneers in academic research and industry translation, the company's chairman Wang Daifa and general manager Guo Genmiao will lead the Huichuang Medical team to develop more products, benefiting more patients.

Wang Keshu, Partner of Changhai CapitalExpressed: I am very pleased to have the opportunity to continue collaborating with Huichuang Medical, assisting Huichuang Medical in further solidifying its leading position in the fNIRS field. Under the promotion of Huichuang Medical, fNIRS has not only achieved breakthroughs in existing paradigms and overcome import restrictions, but also become a "universal key" for exploring the brain and neuroscience, deeply engaging in more cutting-edge treatment methods such as neuro-modulation and brain-computer interfaces. I look forward to Huichuang Medical continuously bringing valuable brain science products to China's brain science field in the future!

Xingfu Capital is a leading new private equity investment institution in China. Its management team has profound backgrounds in equity investment, investment banking, and corporate operations. The firm focuses on discovering and assisting outstanding enterprises in China's emerging industries to become "hidden industry champions." It has accumulated solid industry insight and resource integration capabilities in core and application areas of digitalization and intelligence. With over 10 billion yuan in cumulative managed assets, its main investors include well-known market-oriented funds of funds, insurance companies, listed companies, private entrepreneurs, and family wealth funds. It has invested in more than 80 projects, mostly exclusive investments or leading investments in "hidden champions" or "hidden champion prospects" within niche industries.

Shengjing Jia Cheng, established in 2011, is a platform under Shengjing Network, China's leading new economy service platform. It focuses on technological innovation and industrial investment, with over 13 billion RMB invested in technological innovation. The platform primarily targets sectors with upward K-shaped growth curves such as technology, healthcare, and industrial internet. It has invested in more than 2,500 global innovation and entrepreneurship projects, and its investment portfolio includes 236 listed companies as well as many star enterprises/unicorns. Shengjing's direct investment fund follows a dual-driven strategy of "leading investments in advantageous tracks with strong empowerment" and "co-investment through a fund-of-funds to select the best of the best." It has invested in numerous outstanding companies such as Guolian Shares, Pharmaron, Deepinfar, Yimo Shenzhou, ESWIN, EasyWork, Kingsthub, and Nowwa Coffee.

Changhai Capital is a financial advisor focused on the healthcare sector, providing companies with in-depth and customized financing strategies and services. The team has extensive industry experience in the fields of life sciences, medical devices, diagnostics, and healthcare services. They have led and participated in the financing of several high-profile companies, assisting them in achieving rapid growth and maximizing their value.