Xiangyu Medical Becomes Henan's First Sci-Tech Innovation Board Listing in the Year of the Ox

Original Title: Henan's First in the Year of the Ox!Xiangyu MedicalSunnyou Rings the Bell for Listing on the STAR Market Source: Dahe Financial Cube

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Henan’s First STAR Market Listed Company in the Year of the Ox Has Arrived. On March 31, with the ringing of the listing gong, Xiangyu Medical Co., Ltd. (Stock Abbreviation: Sunnyou Medical; Stock Code: 688626.SH) ushered in a historic moment.

This follows the January 29Blue Sky Gas, another listed company in Henan Province in 2021, followingJianlong Micro-Nano、Shijia PhotonsThe third STAR Market-listed company in Henan Province thereafter.

Sunnyou Lists on the STAR Market,

Henan’s Third STAR Market Company Emerges

At 8:00 a.m. on March 31, all preparations for operations at the listing hall of the Shanghai Stock Exchange’s STAR Market were in place.

At 9:25 a.m., with the clear and resonant ring of the gong inside the Shanghai Stock Exchange, Xiangyu Medical officially entered the STAR Market. The market opened at 9:30 a.m., with Xiangyu Medical’s opening share price at RMB 43, representing a 53.64% increase.

Since the official launch of the STAR Market on July 22, 2019, Henan-based sci-tech innovation enterprises Jianlong Micro-Nano and Shijia Photons have successively listed on the board. With Sunnyou Medical’s successful listing on the A-share market, Henan’s capital market has officially welcomed its third company on the STAR Market.

On the day of the gong-striking ceremony, He Yongzheng, Chairman of Sunnyou Medical, stated, “The successful listing of Sunnyou Medical holds profound significance for the company’s development. Going public signifies not only new opportunities for growth but also greater social responsibility. Seizing this opportunity to enter the capital market, we will remain true to our original aspiration, strive diligently, and further enhance our comprehensive strength through capital support and the meticulous implementation of projects funded by the offering. We are committed to building Sunnyou Medical into a leading innovative enterprise in the field of rehabilitation equipment.”

Sunnyou Medical Reports Dual Growth in Revenue and Net Profit,

The Future Market for Rehabilitation Medical Devices Exceeds 100 Billion Yuan

According to available information, Xiangyu Medical Co., Ltd., located in Neihuang County, Anyang City, is a national high-tech enterprise integrating the research and development, production, and sales of rehabilitation physiotherapy equipment and trauma treatment devices. Its product portfolio consists of rehabilitation medical devices, encompassing over 400 products across categories such as sound therapy, light therapy, electrotherapy, magnetotherapy, physical therapy, and rehabilitation assessment. These products primarily provide targeted training and therapeutic interventions for the elderly, individuals with disabilities, and those with functional impairments, aiding in the gradual restoration of their physical functions.

Driven by growing public awareness of health and medical care, increased national healthcare expenditure, and continuously enhanced brand influence, Sunnyou Medical has achieved consecutive annual growth in operating revenue.

According to Wind data, from 2017 to 2020, Xiangyu Medical achieved revenues of RMB 289 million, RMB 359 million, RMB 427 million, and RMB 496 million, respectively. Correspondingly, its net profit attributable to shareholders also continued to rise, reaching RMB 64.4742 million, RMB 80.3273 million, RMB 129 million, and RMB 196 million, respectively.

Latest performance figures show that from January to March 2021, Sunnyou Medical is expected to achieve operating revenue of RMB 93.0425 million to RMB 102.3467 million, representing a year-on-year increase of 42.03% to 56.23%. The estimated net profit is projected to be between RMB 31.5065 million and RMB 35.0442 million, marking a year-on-year growth of 51.74% to 68.78%.

Sunnyou’s net profit margin also rose significantly, from 22.3% in 2017 to 39.48% in 2020. In terms of product structure, Sunnyou’s revenue primarily consists of sales from rehabilitation assessment equipment, rehabilitation training equipment, rehabilitation physiotherapy equipment, and consumables and accessories. Among these, rehabilitation physiotherapy equipment accounts for a relatively high proportion of total revenue, approximately 60%.

A relevant executive at Sunnyou previously stated to reporters, “Currently, the company’s market presence covers all 31 provinces and municipalities across China, with over 10,000 channel partners, achieving a market coverage rate of approximately 40%. We directly serve more than 100,000 medical institutions, addressing rehabilitation needs for hundreds of millions of patients.”

It is worth noting that the rehabilitation medical device market still has significant room for growth.

Relevant research data indicates that the scale of China's rehabilitation medical industry showed a year-on-year upward trend from 2011 to 2018. In 2011, the market size of China's rehabilitation medical industry was RMB 13.4 billion, which grew to RMB 45 billion by 2018, with a compound annual growth rate (CAGR) of 19%. Based on this projection, the industrial scale of rehabilitation medical devices is expected to exceed RMB 100 billion by 2023.

“Currently, there is a huge population with rehabilitation needs in China, but the supply of rehabilitation medical services is severely insufficient. As China's healthcare system gradually aligns with that of developed Western countries, the future market capacity of the rehabilitation industry may exceed expectations,” analyzed industry insiders.

Fundraising Amount Exceeds 1.1 Billion Yuan,

Sunnyou Plans to Increase Investment in Smart Rehabilitation Medical Care and Other Fields

According to Sunnyou Medical's prospectus, the company issued 40 million shares in this public offering at an issue price of RMB 28.82 per share, raising a total of RMB 1.153 billion, with net proceeds amounting to RMB 1.049 billion. The lead underwriter wasHaitong Securities。

Regarding the use of proceeds, Sunnyou Medical will primarily allocate the funds raised in this offering to the following projects: the technological transformation project for the production of intelligent rehabilitation medical equipment, the production and construction project for elderly care and postpartum rehabilitation medical equipment, the construction project for the R&D and exhibition center for rehabilitation equipment, the R&D and sales center project for intelligent rehabilitation equipment (Southwest), and operational reserve funds.

Upon completion of the intelligent rehabilitation medical equipment production technology transformation project, the annual output of rehabilitation medical equipment and related products will reach 62,700 units. Investment in the production of elderly care and postpartum rehabilitation equipment, along with the establishment of new intelligent production lines, will enable an annual production capacity of 10,090 units.

Regarding this capital raising, Xiangyu Medical stated that it will take the initial public offering and listing of new shares as an opportunity for development. By combining the construction of projects funded by the raised capital, the company will leverage its advantages in scientific research, technology, and management to deepen its domestic layout in the rehabilitation industry. Simultaneously, it aims at the international rehabilitation industry market and will gradually expand its international business.

The rehabilitation equipment industry is technology-intensive, demanding high comprehensive capabilities in professional rehabilitation knowledge and application, technological innovation, and product research and development. Reporters from Dahe Daily·Dahe Financial Cube noted that over the past few years, Xiangyu Medical has consistently prioritized technological R&D, with its R&D investment showing a growing trend.

According to the prospectus, Sunnyou’s R&D expenditure as a percentage of revenue rose from 6.02% in 2017 to 10.6%, an increase of approximately 4 percentage points. In the first half of 2020, Sunnyou incurred R&D expenses of RMB 19.7 million. Meanwhile, the company’s R&D team has been continuously expanding. As of the end of June 2020, Sunnyou had 276 R&D personnel, accounting for 22.83% of its total workforce. The R&D staff possess diverse professional backgrounds spanning multiple disciplines, including electronic technology, computer technology, signal processing technology, precision mechanics, and clinical medicine.

In his address, He Yongzheng introduced that since its establishment in 2002, Sunnyou has remained dedicated to the field of rehabilitation medical devices. The company possesses independent intellectual property rights for core technologies across more than 30 technical areas, including shockwave therapy, phototherapy, electrotherapy, and magnetotherapy. As one of the few enterprises in China with comprehensive R&D and manufacturing capabilities for a full range of rehabilitation medical devices, Sunnyou has leveraged its robust R&D innovation and extensive technological reserves to obtain registration and filing approvals for 139 medical device products. This has resulted in a diverse product portfolio comprising 20 major series and over 400 proprietary products.

“To better sustain our R&D innovation capabilities, the company has established specialized project assessment and incentive management measures for research and development personnel, providing substantial bonus incentives to the R&D team,” He Yongzheng told reporters from Dahe Daily·Dahe Financial Cube.

Henan's Capital Market "Great Acceleration"

The Quiet Rise of Sci-Tech Innovation

March 31 was a date of extraordinary significance for Sunnyou Medical, and even more so for Henan Province. In a sense, the scientific and technological innovation forces in Henan are undergoing an evolution akin to the Taoist concept: “One begets Two, Two begets Three, and Three begets all things.”

On December 4, 2019, Jianlong Micro-Nano, the leader in the molecular sieve industry, rang the bell for its listing, becoming the first enterprise from Henan Province to be listed on the STAR Market, thereby achieving a breakthrough from 0 to 1 for Henan on the STAR Market.

Following closely behind, Shijia Photonics took less than three months from the formal acceptance of its application to successful approval, and successfully listed on the STAR Market on August 12, 2020.

Today, Sunnyou Medical rang the bell for its listing, achieving a “triple” leap. Notably, not long ago, Jinguan Electric successfully passed the review for the STAR Market, while a batch of enterprises including Xinda Jie’an and Sinosteel Luonai are sprinting toward their STAR Market listings.

This means that in Henan, a major agricultural province, scientific and technological strength is quietly rising.

And this is only in the field of scientific and technological innovation; looking at Henan's entire capital market, last year was even more fruitful.Jindan Technology、Jiean High-Tech、Xinqianglian、Kaipu Testing、Zhongjing Foods、Ruifeng New Materials, Blue Sky Gashave been successively listed on the A-share market. In the Hong Kong stock market,Xingye Property Management, Jianye New Life, Hongli Medical Management, Dashan EducationFour companies have also successively completed their initial public offerings.

Not only that, but the pool of Henan-based companies preparing for initial public offerings (IPOs) is also expanding. Among the 482 enterprises recently designated as key provincial IPO candidates in Henan Province, Zhengzhou has 89 companies, ranking first. This is followed by Luoyang with 51, Anyang with 37, Nanyang with 36, and Xuchang with 29. The selected companies span multiple sectors, including machinery manufacturing, electronic information, environmental protection, finance, biotechnology, agriculture, and tourism.

“A journey of a thousand miles begins with a single step.” The accelerated pace of Henan-based companies going public is inextricably linked to the series of policies introduced by the Henan provincial government in recent years to promote listings. Pei Fangliang, Deputy Dean of the Huanghe Economic Industry Research Institute, told reporters, “As the pilot registration-based IPO system expands from the STAR Market to the ChiNext Board, China’s capital market will continue to improve. Coupled with the increasingly favorable policy environment for capital markets in Henan, more ‘hard-tech’ enterprises in the province will shift into higher gear and accelerate their growth.”