EB Securities: maintains a "buy" rating on MICROPORT (00853) with significant results in cost reduction and efficiency improvement.

EB SECURITIES released a research report stating that, considering factors such as the impact of group procurement, the company reducing various expenses, and focusing on core business, it is expected that MICROPORT (00853) will continue to reduce losses. The net profit forecast for the years 2025 to 2026 has been raised to -30/96 million USD (originally -59/91 million USD), with an additional net profit forecast for the year 2027 of 133 million USD. The company is a leading domestic high-value consumables enterprise with strong research and development capabilities, maintaining a "buy" rating. EB SECURITIES' main points are as follows: Events: The company recently announced that 1) according to MICROPORT Group's accounting policy, it cannot control MICROPORT NEURO but still maintains significant influence over it, therefore terminating the merger with MICROPORT NEURO, which requires disclosure of the transaction. 2) MicroPort Heart Congress held a shareholder meeting to consider and approve the major asset restructuring proposal to acquire MicroPort Heart Rhythm Management Co., Ltd. This acquisition will drive deeper integration of MicroPort's two core business sectors: structural heart disease and cardiac rhythm management. Improvement in governance structure injects new energy, overseas business becomes a core growth engine. Regarding the company's governance, the fund under Shangshi Capital has become an important strategic shareholder of the company, potentially injecting new energy into governance and business development. The company recently completed the restructuring of the rhythm management and structural heart disease business, aiming to create a comprehensive heart disease platform. The new company will integrate MicroPort Heart Rhythm Management's AI diagnosis and algorithm technology with MicroPort Heart Congress' technology accumulation in structural heart disease intervention therapy, delivery systems, and biomaterials, to create an integrated platform for "structural heart disease + rhythm management + heart failure management." The company also announced the termination of the merger with MICROPORT NEURO, with the bank believing that governance improvement is still ongoing. At the same time, the company is actively building a global commercialization platform to help the products of various business sectors go global, with overseas revenue from overseas business in the first half of 2025 reaching 59.8 million USD, a year-on-year increase of 57.3%, effectively offsetting the pressure from domestic group procurement. The company is a leading enterprise in high-value consumables, and since 2025, it has achieved multiple research and development results in various business lines: obtaining a total of 20 NMPA Class III medical device initial registration certificates, and adding 232 new initial registration certificates overseas; TuMai long-distance surgery Siasun Robot&Automation has become the first globally approved long-distance surgery Siasun Robot&Automation product to be listed. Significant cost reduction results achieved, loss narrowing as planned. Through measures such as focusing on core business and optimizing resource allocation, the company's profitability has significantly improved. In a complex domestic and international environment, the company achieved revenue of 548 million USD in the first half of 2025, a decrease of 2.0% year-on-year; the net loss was greatly reduced from 107 million USD in the same period of the previous year to 36.36 million USD, indicating a turning point in operations. The improvement in profitability is mainly due to significant cost control effectiveness: the company's operating expense ratio was optimized by 8.1 percentage points year-on-year, and the research and development expense ratio decreased from 20.6% to 13.2%. The company previously announced that it would achieve the following performance targets: a net loss of no more than 110 million USD in the first half of 2025, a net loss of no more than 55 million USD for the full year of 2025, a net profit of no less than 45 million USD in the first half of 2026, and a net profit of no less than 90 million USD for the full year of 2026. Overall, the company is making significant progress in reducing losses through measures such as focusing on business, increasing revenue, and reducing costs. Risk warning: High-value consumables price reductions exceed expectations, orthopedics losses lower than expected, acquisition integration risks, etc.