Core Medical's IPO Halted 48 Hours Before Listing Review Amid Ongoing Controversies

On the evening of June 30, a brief supplementary announcement on the official website of the Shanghai Stock Exchange thrust Shenzhen Core Medical Technology Co., Ltd. (hereinafter referred to as “Core Medical”), which was vying to become the first listed company in China for domestically produced artificial hearts, into the center of public controversy. The announcement stated that the 41st Listing Committee review meeting of 2026, originally scheduled for July 2, had been canceled because Core Medical still had relevant matters requiring further verification. This decision came just 48 hours before the originally scheduled meeting time.

As the first innovative medical device company to have its application accepted after the relaunch of the fifth listing standard on the STAR Market, Core Medical was once highly anticipated by investors. Its flagship product, the Corheart®6 implantable artificial heart, marketed as the “world’s smallest fully magnetically levitated” device, captured over 45% of the domestic market share within two years of its launch. More than 30 institutions, including Hillhouse Capital, Zhengxingu Capital, and Lianxin Capital, flocked to invest in the company, driving its pre-IPO valuation up to RMB 3.333 billion.

Yet beneath the halo, controversy has never ceased. From international authoritative journals publicly questioning the mischaracterization of its “fully magnetically levitated” technology, to mounting losses and risks associated with reliance on a single product, to a series of governance and compliance concerns—including nominee shareholding arrangements, significant changes in the use of raised funds, and challenges to the validity of core patents—these compounding issues ultimately brought the IPO sprint to an abrupt halt at the final stage.

Sprinting to Become the “First Stock of Artificial Hearts”: The Rise of a Star Enterprise

“New Financial News Network” has learned that the story of Core Medical began in Shenzhen in 2016. According to the prospectus, the company’s founder and actual controller, Yu Shunzhou, studied in the United States in his early years and engaged in research on artificial hearts. Motivated by the personal experience of losing his mother to heart failure, he resolved to return to China to start a business and tackle the challenge of localizing the production of artificial hearts.

In August 2016, the predecessor of Core Medical, Shenzhen Core Medical Device Co., Ltd., was established. The initial registered capital of RMB 10 million was fully contributed and held in trust by Yu Shunli, the younger brother of Yu Shunzhou. At that time, Yu Shunzhou was still in the United States and found it inconvenient to hold shares directly. In June 2018, Yu Shunzhou returned to China to join the company on a full-time basis, and the nominee shareholding arrangement was formally terminated.

Over the nearly decade since its establishment, Core Medical has focused on the therapeutic sector for end-stage heart failure, specializing in two major series of artificial heart products: implantable and interventional. As of the IPO filing, the company had deployed five implantable and six interventional artificial heart products, covering the full spectrum of clinical needs across “long-term to short-term,” “left ventricular to biventricular,” and “pediatric to adult” scenarios.

Among these, the Corheart®6 magnetically levitated implantable left ventricular assist system, approved for market launch in June 2023, is its only commercialized implantable product. Weighing only 90 grams, it is promoted by the company as “the smallest and lightest commercially available magnetically levitated implantable artificial heart in the world.”

In 2025, the interventional ventricular assist system CorVad®4.0 was approved for market launch, becoming the first approved interventional artificial heart product in China. As a result, Core Medical has become the only company globally to achieve commercialization of both implantable and interventional artificial hearts.

Leveraging the lightweight advantages and rapid market expansion of Corheart®6, Core Medical has experienced explosive revenue growth. Prospectus data shows that from 2023 to 2025, the company’s operating revenues were RMB 17 million, RMB 94 million, and RMB 164 million, respectively, representing a nearly tenfold increase over three years. In 2025, nationwide implantations of Corheart®6 in China exceeded 700 units, securing its leading position in the domestic implanted artificial heart market with a market share of over 45%, while cumulative implantations surpassed 1,300 cases.

In terms of capital, Core Medical has also been highly sought after. Prior to its IPO, the company completed multiple rounds of financing, with a shareholder lineup that included renowned institutions such as Lianxin Capital, Zhengxingu, Hillhouse Investment, Hetang Venture Capital, CICC Capital, and Puhua Capital. The company’s valuation was approximately RMB 1.587 billion in early 2022 and reached RMB 3.333 billion by the time it filed for its IPO in 2025, representing a 129% surge in valuation over two and a half years.

In April 2023, Core Medical officially commenced IPO tutoring; on November 6, 2025, its IPO application for the STAR Market was accepted by the Shanghai Stock Exchange, making it the first innovative medical device enterprise to have its application accepted following the reinstatement of the STAR Market’s fifth listing standard (namely, “projected market capitalization of no less than RMB 4 billion, with main business or products requiring approval from relevant national authorities, substantial market potential, and current achievement of phased results”).

The review process subsequently advanced rapidly: the first round of inquiries commenced in December 2025, the initial response was completed in February 2026, the response to the second round of inquiries was disclosed in April, and on June 25, it was announced that the company would appear before the listing committee for deliberation on July 2. Everything appeared to be proceeding smoothly, with the title of “the first listed company for domestically produced artificial hearts” seemingly within reach.

However, the announcement on June 30 regarding the cancellation of the review brought everything to an abrupt halt. The Shanghai Stock Exchange did not disclose the specific matters under verification, leading to widespread market speculation that it was directly related to the ongoing technical controversies, financial compliance, and governance issues that have been intensifying recently.

The Dispute over Technological Qualitative Assessment: The Authenticity of the Route Under the Guise of "Fully Magnetically Levitated"

Among all the controversies, the dispute over the classification of “fully magnetically levitated” technology is the most central and impactful. The bearing technology of artificial hearts directly determines hemocompatibility, thrombosis risk, and long-term safety. “Fully magnetically levitated” technology is widely recognized as the technical benchmark for third-generation artificial hearts and a symbol of corporate core competitiveness.

In December 2025, the official journal of the International Society for Artificial Organs, *Artificial Organs*, published a letter to the editor titled “Expression of Concern,” authored by Dr. Kurt Dasse, a recipient of the Lifetime Achievement Award from the American Society for Artificial Organs and Clinical Professor of Cardiothoracic Surgery at the University of Louisville School of Medicine.

The letter directly points out the chaotic use of technical terminology in the current artificial heart industry and specifically names Core Medical’s Corheart®6: independent external experts have characterized its technical architecture as a “centrifugal pump equipped with magnetically assisted dual hydrodynamic bearings,” whereas the manufacturer markets it externally as a “fully maglev device.”

Around the same time, the 31st Annual Meeting of the International Society for Mechanical Circulatory Support (ISMCS) was held in Vienna, where attending experts reached a consensus on the definition of “fully magnetically levitated blood pumps”: A true fully magnetically levitated blood pump achieves five-degree-of-freedom suspension and stability of the rotor entirely through magnetic bearings during normal operation, without relying on hydrodynamic bearings for primary support.

Dr. Dasse further pointed out that the Corheart®6 features an internal spiral groove structure, a typical design of hydrodynamic bearings, which forms a blood film to support the rotor. Its essence is a “magnetically assisted hydrodynamic bearing” architecture, rather than true fully magnetic levitation technology. The authoritative textbook *Mechanical Circulatory and Respiratory Support (Second Edition)* also classifies the Corheart®6 as a product with “magnetically assisted hydrodynamic bearings.”

Artificial heart bearing technology is categorized into three generations: the first generation of contact bearings (mechanical bearings), the second generation of magnetic-hydrodynamic hybrid bearings, and the third generation of fully magnetically levitated bearings. Fully magnetically levitated technology enables the rotor to be completely suspended by magnetic forces without physical contact, resulting in minimal blood damage, a lower risk of thrombosis, and superior long-term durability. It is currently recognized globally in clinical practice as the optimal technological approach.

Taking Abbott’s HeartMate 3, an international benchmark product, as an example, it employs a fully magnetically levitated design. With over 50,000 cumulative implants worldwide, long-term follow-up data have confirmed its significant superiority over previous-generation devices in reducing the incidence of thrombosis and stroke. Similarly, Suzhou Tongxin Medical’s CH-VAD adopts a fully magnetically levitated approach and is the first fully magnetically levitated artificial heart approved by China’s National Medical Products Administration (NMPA).

If the Corheart®6 is not a truly fully magnetically levitated device but rather employs a hybrid magnetic-hydrodynamic architecture, its core technological barriers and clinical value would be significantly diminished. For clinicians, the technical approach directly influences surgical decision-making and the assessment of patient prognosis; for regulators, different technical pathways correspond to distinct risk classifications and review standards; and for investors, the “fully magnetically levitated” label is directly tied to valuation logic and the determination of scientific and innovative attributes.

In response to skepticism, Core Medical has consistently maintained that its product is “fully magnetically levitated.” In April 2026, the company stated in a reply to media inquiries that the Corheart®6 employs “time-sharing, zone-specific dynamic axial full magnetic levitation control technology.” During normal operation, the rotor is entirely suspended by magnetic forces, with no hydrodynamic bearings present. The spiral groove structure serves solely for sealing and auxiliary hydrodynamic support, and is not a load-bearing component.

In the second round of review inquiries, the Shanghai Stock Exchange also specifically followed up on issues such as the accuracy of the term “fully magnetically levitated,” the basis for classifying technological routes, and technical differences from competing products. In its response, Core Medical cited test reports and patent documents to argue that its product meets the definition of fully magnetically levitated; however, it did not publicly disclose detailed internal structural designs or mechanical testing data, failing to fully allay market concerns.

It is worth noting that Dr. Kurt Dasse, who raised the objections, is not a completely neutral third party—he also serves as a technical consultant for Suzhou Tongxin Medical, which is Core Medical’s most direct competitor, as both companies are racing to become the first listed domestic artificial heart company in China. This commercial connection has cast the controversy in the light of industry competition, but it does not resolve the technical characterization issues at the academic level.

The Loss-Making Dilemma Behind Rapid Growth and Commercialization Concerns

Setting aside the technical controversies, Core Medical’s financial fundamentals are equally contentious. Behind the impressive data showing nearly tenfold revenue growth over three years lie a series of risks, including widening losses, reliance on a single product, continuous decline in unit prices, and high customer concentration.

The most significant risk facing Core Medical is its extreme product concentration. From 2023 to 2025, 100% of the company’s operating revenue was derived solely from its single product, Corheart®6. Although the interventional product CorVad®4.0 received market approval in 2025, it contributed minimal revenue that year and has not yet achieved scaled commercial sales.

This means that the company’s entire performance, valuation, and future prospects hinge on a new product launched only in 2023. Should this product encounter quality issues, competitive pressures, policy-driven price cuts, or clinical adverse reactions, the company’s operations would suffer devastating consequences.

Compared with industry peers, international giant Abbott boasts a diverse cardiovascular product portfolio in addition to its HeartMate series. While domestic peer Tongxin Medical also relies on a single product, it benefited from an earlier market launch and more robust long-term clinical data. Core Medical, having commercialized its product for only slightly over two years before rushing toward an IPO, suffers from insufficient validation of its product lifecycle and weak risk resilience.

More concerning is the rapid decline in the product’s unit price. The prospectus shows that from 2023 to 2025, the average selling price (excluding tax) of Corheart®6 was RMB 290,400 per unit, RMB 247,200 per unit, and RMB 229,600 per unit, respectively, representing a cumulative decrease of 20.93% over the three-year period.

Core Medical explained that the decline in unit price was primarily due to an increased proportion of sales through the platform distribution model, under which platform distributors benefit from tiered pricing discounts owing to their larger single-purchase volumes. The revenue share from the platform distribution model rose from only 20.25% in 2023 to 69.50% in 2025.

In essence, this is an expansion strategy of “trading price for volume.” While reducing prices to rapidly capture market share and increase implantation volumes is a common approach during the early commercialization phase of innovative medical devices, its sustainability remains questionable.

On one hand, the listed price of artificial hearts on procurement platforms is approximately RMB 580,000, while the ex-factory price has dropped to around RMB 230,000, leaving limited room for further price reductions and directly squeezing profit margins. On the other hand, if artificial hearts are included in provincial or national centralized volume-based procurement programs in the future, prices may experience a precipitous decline, necessitating a restructuring of the company’s profitability model.

Although the gross profit margin reached 74.79% in 2025, a relatively high level within the medical device industry, substantial R&D and sales expenses have continued to erode profits, resulting in widening losses year by year. On the R&D front, R&D expenditures from 2023 to 2025 were RMB 119 million, RMB 151 million, and RMB 203 million, respectively, totaling RMB 473 million over the three-year period. The R&D expense ratios stood at 717.13%, 160.86%, and 123.84%, respectively, far exceeding the industry average.

For innovative medical device companies with robust product pipelines, high R&D investment is normal. However, clinical expenses and material costs constitute a significant proportion of Core Medical’s core R&D expenditures, prompting regulatory inquiries regarding the reasonableness of its R&D expense allocation. On the sales front, selling expenses over the past three years amounted to RMB 13.9169 million, RMB 36.8736 million, and RMB 58.3524 million, respectively, corresponding to selling expense ratios of 84.09%, 39.36%, and 40.02%. These figures are significantly higher than the industry average for comparable companies (23%–34%).

Notably, conference fees and academic promotion expenses surged rapidly, with conference fees reaching RMB 13.0835 million in 2025, accounting for nearly 20% of selling expenses, reflecting the product’s heavy reliance on academic promotion and channel maintenance for commercialization.

The net profit attributable to the parent company for 2023–2025 was RMB -170 million, RMB -132 million, and RMB -172 million, respectively. As of the end of 2025, the accumulated uncovered losses amounted to RMB 466 million. Based on annual sales volume, the company incurred a loss of approximately RMB 348,000 and RMB 252,000 per Corheart®6 unit sold in 2024 and 2025, respectively.

Cash flow is also under pressure. The net cash flows from operating activities over the past three years were -108 million yuan, -89 million yuan, and -143 million yuan, respectively, remaining consistently negative with a widening gap, indicating that the company’s self-sustaining capability has yet to be established. As the platform distribution model expands, customer concentration continues to rise. From 2023 to 2025, the proportion of sales revenue contributed by the top five customers was 58.01%, 79.55%, and 80.70%, respectively, with over 80% of revenue in 2025 derived from the top five distributors.

High customer concentration implies weak bargaining power and significant channel risk. If major distributors terminate their partnerships, switch to competitors, or demand lower prices, the company’s revenue will experience substantial fluctuations. Of greater concern is the fact that some core distributors were established very recently; for instance, Shanghai Feiruibo Medical Device Co., Ltd. was founded in March 2024 and became a key client of Core Medical the following year, raising doubts about its qualifications and distribution capabilities.

Behind the Familial Concerns: Multiple Doubts Regarding Equity, Fundraising, and Data

If technological and financial disputes are attributed to industry characteristics and stages of development, then issues such as equity governance, changes in fundraising investment projects, and patent crises directly point to the standardization of corporate governance and the quality of information disclosure.

Core Medical’s equity history has always revolved around its two founding brothers, with past nominee shareholding arrangements and the anomalous structure of the employee stock ownership platform becoming the focus of two rounds of regulatory inquiries.

At the time of the company’s establishment, 100% of the equity was held by Yu Shunli, brother of Yu Shunzhou, as a nominee shareholder, until the nominee arrangement was terminated in 2018. Although Yu Shunli no longer holds shares directly, he maintains significant interests in three employee stock ownership platforms: Shenzhen Xinfu (holding 7.35% of the company’s shares), in which Yu Shunli holds a 6.85% interest; Shenzhen Xinzhu (holding 2.62% of the company’s shares), in which Yu Shunli holds a 1.97% interest; and Tianjin Xincheng (holding 1.31% of the company’s shares), in which Yu Shunli holds a 77.77% interest.

Tianjin Xincheng, serving as an employee stock ownership platform, has over 70% of its shares held solely by the actual controller’s younger brother, with the remaining employees collectively holding only 22%. This significantly undermines its “employee incentive” nature, making it appear more like an indirect shareholding channel for the actual controller’s family. Yu Shunli, who serves merely as the company’s Administrative Director and is not part of the core technical or management team, has nonetheless received substantial equity incentives through the stock ownership platform, raising questions about the rationality of this arrangement.

Regulators also focused on the determination of parties acting in concert. Yu Shunzhou directly and indirectly controlled 29.14% of the voting rights, which increased to 38.97% after signing concerted action agreements with multiple institutional shareholders. However, the shareholding of his younger brother, Yu Shunli, was not recognized as part of the parties acting in concert. The Shanghai Stock Exchange requested an explanation for this omission and whether there were any attempts to circumvent the determination of control.

Furthermore, the suspicious changes to the fundraising investment projects constitute another major point of contention. A comparison between the initial prospectus released in November 2025 and the version submitted for review in June 2026 reveals that while the total fundraising amount remained unchanged at RMB 1.217 billion, the composition of the projects underwent significant adjustments: the originally planned “Marketing Network and Digitalization Construction Project” (with a proposed investment of RMB 166 million) was completely removed; the proposed investment for the “Circular Support for Frontier Product R&D Project” increased from RMB 711 million to RMB 877 million, representing an exact increase of RMB 166 million;

In other words, the RMB 166 million originally earmarked for marketing and promotion, academic conferences, and channel development was quietly reallocated to R&D projects prior to the board meeting.

This change has sparked multiple questions regarding the rigor of project calculations: The first version of the prospectus already included detailed calculations for R&D projects; the temporary addition of 166 million yuan indicates that the initial calculations were not rigorous, or that the marketing project itself lacked sufficient justification for its initiation. Whether it caters to review preferences: The STAR Market emphasizes scientific and technological innovation attributes, and an excessively high proportion of marketing projects may raise doubts; transferring funds to R&D categories makes it easier to pass the review.

Timeliness of Information Disclosure: Major project changes were not separately announced or explained, but only adjusted in the updated prospectus, resulting in insufficient transparency.

Furthermore, the company’s substantial cash reserves on its books, coupled with its decision to raise RMB 200 million to supplement working capital, have drawn regulatory inquiries regarding the rationale behind such a move. Meanwhile, patents are the lifeblood of innovative medical device enterprises; however, two core invention patents held by Core Medical are currently facing challenges for invalidation.

As disclosed in the prospectus, third parties have filed requests for invalidation of the patent rights for the “Ventricular Assist Device” (Patent No. ZL201811519883.1) and the “Blood Pump” (Patent No. ZL202011525102.7), which remain under review as of the date of signing the prospectus.

Although the company stated that the invalidation of these two patents would not have a significant adverse impact on its production and operations, as invention patents directly related to core products, their invalidation would not only weaken technological barriers but also potentially trigger patent litigation from competitors, thereby impacting IPO valuation and subsequent market competition.

Regarding the quality of information disclosure, there are still multiple inconsistencies in the data. Media comparisons have revealed discrepancies between the product sales volume and pricing data in some of Core Medical’s early bidding documents and the figures disclosed in its prospectus. Additionally, the manipulation of the “protocol-adjusted per-protocol set” in clinical data statistics has sparked controversy. The initial success rate of the clinical trials was 94%, which rose to 97.9% after the Clinical Events Committee adjusted the analysis set. The basis for this adjustment and its statistical compliance remain questionable.

Furthermore, the correlation between the Company’s charitable donations and sales collections has also drawn attention. During the reporting period, Core Medical made cumulative charitable donations of approximately RMB 13.9 million, primarily to medical foundations. Meanwhile, there were instances where payments from certain hospital end-customers were routed through these foundations. Regulatory authorities have required clarification on whether the donations are linked to sales, and whether there are risks of commercial bribery or improper transfer of benefits.

Regulatory Scrutiny and Industry Reflections: A Value Interrogation Under the Fifth Listing Standard of the STAR Market

The emergency withdrawal from review prior to the meeting is a rare occurrence in the history of the STAR Market. Although the Shanghai Stock Exchange did not explicitly disclose the specific verification matters, the market widely believes that this decision is directly related to the recently exposed multiple controversies involving technology, finance, and corporate governance.

From the perspective of the review pace, Core Medical rushed to the listing committee meeting after only two rounds of inquiries, leaving many issues insufficiently clarified. The controversy over the technical characterization involves the determination of STAR Market attributes, which is a core red line in the STAR Market review process. Issues regarding equity governance and changes to fundraising investment projects pertain to the quality of information disclosure and the standardization of corporate governance. Meanwhile, the sustainability of commercialization amidst continuous losses concerns investor protection.

The cancellation of deliberation does not equate to the termination of an IPO; the company may still relist for review after completing subsequent verification. Regardless of the outcome, this “braking” action signifies that regulators have not relaxed their scrutiny of companies listing under the fifth set of criteria, with the authenticity of scientific and technological innovation attributes and the sufficiency of information disclosure remaining baseline requirements.

The controversy surrounding Core Medical is also a microcosm of the entire domestic artificial heart industry in China. There are over 1.5 million patients with end-stage heart failure in China, while only about 1,000 heart transplants are performed annually, resulting in an extreme imbalance between supply and demand. As an alternative treatment option, artificial hearts hold immense market potential.

According to Frost & Sullivan’s estimates, the market size of implantable artificial hearts in China was approximately RMB 260 million in 2024 and is expected to reach RMB 7.96 billion by 2035, representing a compound annual growth rate (CAGR) of over 40% during this ten-year period. The market potential for catheter-based artificial hearts is even more significant, with Abbott’s flagship product, Impella, achieving annual sales exceeding USD 1 billion globally.

Yet beneath the blue ocean, industry challenges remain equally severe. Artificial hearts involve multidisciplinary integration of mechanical engineering, electronics, materials science, and biomedicine; globally, only a handful of companies truly master the core technology of fully magnetically levitated systems. Domestic products have only recently reached the market, and key clinical data—such as long-term survival rates and complication incidence—remain immature. With each device priced at hundreds of thousands of yuan, current coverage relies primarily on out-of-pocket payments and sporadic reimbursement by local medical insurance schemes; widespread adoption hinges on national medical insurance payment policies. Moreover, centralized procurement of high-value medical consumables has become an established trend. Should artificial hearts be included in such procurement programs, significant price reductions would reshape the industry landscape.

In terms of industry competition, a "duopoly" race has currently taken shape in China between Core Medical and Tongxin Medical, with both companies comprehensively benchmarking each other in technological pathways, market share, and IPO progress. International giants such as Abbott and Medtronic are also accelerating their expansion into the Chinese market. The next 3–5 years will be a critical period for domestic artificial heart enterprises in terms of technology validation, market education, and production capacity expansion.

The Deeper Significance of Core Medical’s IPO Controversy Lies in the Scrutiny of the Fifth Listing Standard of the STAR Market. The fifth standard allows pre-profit, or even revenue-less, hard-tech enterprises to go public, with the original intention of supporting breakthroughs in frontier technologies and enabling capital markets to foster technological innovation.

However, in practice, some companies have treated the fifth set of listing standards as a “green channel,” rushing to market before their technologies were fully validated or commercially mature. By packaging technical concepts and overextending industry expectations to inflate valuations, they ultimately left the risks to secondary market investors.

The controversy surrounding “fully magnetically levitated” technology is, at its core, an issue of technological packaging—using ambiguous terminology to craft a high-tech image that supports claims of scientific innovation and justifies high valuations. This serves as a reminder to regulators and the market that the “scientific and technological innovation” designation on the STAR Market must not rest merely on promotional rhetoric and patent counts, but must be grounded in technological authenticity, clinical value, and industrial leadership.

For unprofitable innovative medical device companies, an IPO is not the end goal but the beginning of validation. Regulators should strengthen requirements for technical information disclosure, pushing companies to publicly disclose core technical parameters and head-to-head clinical data, enabling investors to truly assess the technological substance. Meanwhile, companies should abandon hype-driven mindsets, focus diligently on clinical validation and product iteration, and earn market trust through genuine clinical value.

As a leading enterprise in the industry, Core Medical has achieved breakthroughs in product miniaturization and interventional innovation, rapidly promoting the clinical adoption of artificial hearts; its industry value should not be entirely negated. However, controversies over technical claims, flaws in financial governance, and inadequate information disclosure are unavoidable real-world issues.

Core Medical’s IPO story is far from over, and the path toward high-quality development for domestically produced artificial hearts remains long and arduous. New Caiwen Network will continue to closely follow subsequent developments.

       Core Medical IPO: Emergency Halt 48 Hours Before Review, Controversies Never Cease Under the Spotlight