Core Medical's IPO: 5.53 Billion Yuan Loss in 3.5 Years, Sole Product Price Declines, Share Transfer Prices Drop Sharply Before Filing

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Recently, the STAR Market IPO application of Shenzhen Core Medical Technology Co., Ltd. (hereinafter referred to as "Core Medical") has been accepted. This is the first company to be accepted under the fifth set of listing standards for the STAR Market after its restart.Innovative HealthcareMedical device companies, with the world's smallest and lightest fully magnetically levitated artificial heart Corheart®6, have filled the gap in pediatric heart failure treatment in China. In 2024, with over 45.9% of the terminal implantation volume market share, it ranked first in the industry, and in the first five months of 2025, it climbed to 52.86%.

However, after reviewing the prospectus and other related materials, it was found that the company still has many hidden concerns, including significant dependence on a single product and major customers, limited sales scale leading to consecutive years of losses, insufficient capacity utilization, and a significant decline in the price of equity transfers just before the filing. The company's commercialization path still faces challenges.

　　Sales Price of Unique Product Continues to Decline, Low Capacity Utilization Still Raises Funds for Expansion

In terms of products, the company's product structure is relatively单一, with all revenue coming from its only commercialized product, Corheart®6. Currently, the company has several other products under research, but only one介入式product is in the registration approval stage, expected to be approved in 2026. The majority of the others are still in preclinical research, far from commercialization.

Notably, the company's sales are almost entirely outsourced. From 2023 to the first half of 2025, the revenue share from the distributor model increased from 90.84% to 100%. Meanwhile, the revenue share from platform distributors surged from 20.25% in 2023 to 69.24% in the first half of 2025.

Correspondingly, the concentration of the company's customer base has significantly increased, with the sales revenue from the top five customers rising from 58.01% in 2023 to 80.70% in the first half of 2025. Notably, in 2024, the largest customer, "Jiangsu Hengtong Medical Device Sales Co., Ltd.," alone contributed 43.1402 million yuan in sales, accounting for 46.05% of total revenue, highlighting a prominent reliance on major clients.

Due to the company's unified implementation of a tiered pricing policy based on varying order quantities, as the proportion of revenue from the platform distribution model increases, the average selling price of Corheart®6 has continued to decline, dropping from 290,400 yuan/unit in 2023 to 247,200 yuan/unit in 2024, a decrease of approximately 14.86%. In the first half of 2025, the price further decreased to 229,600 yuan/unit.

From a market perspective, the heart failure treatment market has vast potential but extremely low penetration. According to Frost & Sullivan analysis data, by 2024, China will have 1.566 million end-stage heart failure patients, while only 1,064 heart transplant surgeries will be performed, reflecting a severe shortage of cardiac donors. As an alternative treatment, artificial hearts represent a significant unmet need.

In reality, factors such as the high cost of treatment, inconvenience of external wear, and insufficient clinical awareness have significantly compressed the actual market size. This is reflected in Core Medical's sales data, where Corheart®6 has seen gradual growth since its commercialization but remains small in scale, with sales of 57 units in 2023, 379 units in 2024, and 307 units from January to June 2025, bringing the cumulative sales volume to less than 800 units.

Currently, the company has built a production capacity designed to produce 1,100 sets of implantable products annually. In the first half of 2025, the actual output was 367 units, with a capacity utilization rate of approximately 67%. In this IPO fundraising project, the company still plans to invest 139 million yuan in building an "Artificial Heart Industrialization Base" to expand its production capacity. Given that the existing capacity has not been fully utilized and the cumulative total sales of its main product are still less than 800 units, the rationality and necessity of large-scale capacity expansion may need further examination.

　Cumulative Loss of 553 Million Yuan in Three and a Half Years, Significant Decline in Equity Transfer Price on the Eve of Filing

From the financial data, in the period from 2023 to the first half of 2025, the company achieved revenues of 16.55 million yuan, 93.68 million yuan, and 70.47 million yuan respectively, showing a growth trend, but the overall scale remains relatively small. The net profit attributable to shareholders for the period from the first half of 2022 to 2025 was -178 million yuan, -170 million yuan, -132 million yuan, and -73 million yuan respectively, with cumulative losses over three and a half years reaching as high as 553 million yuan.

The direct causes of the losses include two major high expenditures, the first being extremely high R&D investment. From 2022 to the first half of 2025, its cumulative R&D investment reached 488 million yuan. In 2023, 2024, and the first half of 2025, the R&D expense ratios were 717.13%, 160.86%, and 124.17%, respectively. Against the backdrop where other product lines of the company (such as interventional artificial hearts) have yet to be launched and still require massive clinical investments, R&D expenses will continue to squeeze profit margins.

Secondly, there was a large-scale expense of share-based payments. During the reporting period, the company recognized cumulative share-based payment expenses of over 200 million yuan to incentivize core talents. The expenses for each period during the reporting period were 83 million, 63 million, 35 million, and 21 million yuan, respectively.

In terms of cash flow, the company's operating cash flow has remained negative. From 2023 to the first half of 2025, the net cash flow from operating activities was -108 million yuan, -89 million yuan, and -84 million yuan, respectively, with operations entirely reliant on external financing. In the first half of 2025, the company completed a large-scale Series D financing round. As of the end of June 2025, the company’s cash funds amounted to 564 million yuan, indicating no immediate financial pressure in the short term.

In terms of historical evolution, from the end of 2024 to August 2025, the company underwent five share transfers. Notably, the transfer price per share showed significant fluctuations. It increased from 10.67 yuan/share in December 2024 to 12.00 yuan/share in April 2025 (during which Series D financing was completed), and then sharply dropped to 7.78 yuan/share in June 2025.

Specifically, on December 31, 2024, Hetang Health, Lianxin Technology, and relevant parties signed the "Equity Transfer Agreement." Hetang Health transferred 2.8125 million shares of Core Medical it held to Lianxin Technology at a price of 30 million yuan, corresponding to a transfer price of 10.67 yuan per share.

On April 23, 2025, CICC Chuanhe, PwC Ruikun, EF Nine, Hetang Health, and Shenzhen Xinfu transferred their respective shares of Core Medical at a transfer price of 12 yuan per share.

On June 20, 2025, CICC Chuanhe, Haoyu Technology, and other relevant parties signed the "Share Purchase Agreement of Shenzhen Core Medical Technology Co., Ltd." CICC Chuanhe transferred its 2,636,024 shares in Core Medical to Haoyu Technology at a price of 20.5 million yuan, achieving a complete exit. The corresponding transfer price per share was 7.78 yuan per share.

The final two equity transfer prices in July and August 2025 stabilized at 9.41 yuan per share. Within a short span of eight months, the transfer price declined over 20% from its peak, possibly reflecting investors' cautious attitude towards the company's valuation.

Editorial Responsibility: Corporate Observer