Wise Medical Passes STAR Market IPO Review, Plans to Raise RMB 467 Million

EO Healthcare, June 24 – Yesterday, the China Securities Regulatory Commission issued an approval granting registration for the initial public offering (IPO) of Nanjing Vishee Medical Technology Co., Ltd. (“Vishee Medical”).According to VISHEE's prospectus, the initial public offering will not exceed 17.0867 million shares, accounting for 25.00% of the total share capital after the issuance.

VISHEE plans to raise RMB 467 million. The funds will be primarily used for the R&D center construction project, IT infrastructure construction project, rehabilitation equipment assembly and commissioning project, and as reserve capital for marketing services and brand building.

VISHEE, established in 2001 and headquartered in Nanjing, Jiangsu Province, is primarily engaged in rehabilitationMedical Devicesresearch and development, production, and sales. Currently, its main products areElectrical Stimulation, magnetic stimulation devices, electrophysiological equipment, consumables and accessories, and other rehabilitation medical devices and products.

In addition, VISHEE is also conducting R&D on more than ten new products in fields such as next-generation magnetic stimulators and rehabilitation robots.

From 2017 to 2019, VISHEE’s revenues were RMB 144 million, RMB 207 million, and RMB 319 million, respectively, representing a compound annual growth rate (CAGR) of 48.55%. Electrical stimulation products accounted for the largest share of revenue, contributing 45.84% in 2019. Magnetic stimulation products ranked second, accounting for 21.76% of revenue in 2019.Although revenue continues to grow, the market ceiling is limited. Industry analysts note that there are numerous participants in the rehabilitation medical device sector, and VISHEE’s market share is not high.

According to Frost & Sullivan data, from 2014 to 2018, the market size of rehabilitation medical devices in China grew from RMB 11.5 billion to RMB 28 billion. During the same period, the four niche segments of the rehabilitation medical device market focused on by VISHEE expanded from RMB 720 million to RMB 1.66 billion, representing a compound annual growth rate (CAGR) of 23%. Meanwhile, the market size of electrophysiological rehabilitation therapy devices in China increased from RMB 360 million to RMB 580 million.Due to the wide variety of products and a relatively fragmented market, the main competitors in the electrophysiological rehabilitation medical device industry include Natus Medical Incorporated, Shanghai Nuocheng, Shanghai Guangdian, and Guangzhou Runjie. In 2018, VISHEE's market share for electrophysiological products was only 4.6%.

Furthermore, although VISHEE’s R&D expenses have been increasing year by year, their proportion of revenue has been continuously declining. According to its prospectus disclosure,From 2017 to 2019, VISHEE’s R&D expenditures were RMB 0.13 billion, RMB 0.18 billion, and RMB 0.27 billion, respectively; the corresponding percentages were 9.03%, 8.92%, and 8.59%, respectively.

Moreover, the company's sales expenses have risen year after year.From 2017 to 2019, the figures were RMB 42 million, RMB 53 million, and RMB 75 million, respectively, nearly three times the R&D expenses incurred during the same period.VISHEE primarily relies on distributors for its sales channels. Over the past two years, sales revenue generated through distributors has accounted for more than 99% of the total amount, with collaborations established with hundreds of distributors across China.

This article is sourced from Iyiou, an original piece by author Gao Yushan. For reprints or collaborations, please click here.Reprint Notice, unauthorized reproduction will be subject to legal action.