On the evening of January 22, MICROPORT (00853) issued an announcement stating that it expects to turn a net loss into a profit for the 2025 fiscal year, achieving a net profit of no less than $20 million. In the announcement, MICROPORT indicated that the anticipated turnaround is primarily attributable to sustained revenue growth during the period, with overseas business revenue continuing to contribute a rapid year-on-year increase of approximately 70%. The company also noted that, despite downward pressure on product prices from domestic industry policies, its gross profit margin still improved by 2-3 percentage points year-on-year, benefiting from the implementation of cost optimization measures. Simultaneously, the company has been continuously enhancing operational efficiency, with operating expenses decreasing by about 10-11% year-on-year during the reporting period. Finally, the disposal of subsidiaries also contributed positive gains to MICROPORT. Benefiting from the positive profit alert, MICROPORT's stock price opened higher and continued to rise on January 23, with its intraday gain surging to a peak of 12.84% during the morning session. However, the upward momentum lasted less than half an hour; after hitting the high, MICROPORT's stock price began a sharp descent, and by the morning close, the gain had narrowed to less than 4%. In terms of trading volume, MICROPORT's volume for the day reached 77.0671 million shares, setting a new record since last October. Looking at the intraday volume distribution, active trading was concentrated at the market open, meaning many investors bought at the day's peak price. From a chart perspective, after hitting an intraday high of HK$16.28 on October 8 last year, which was the annual peak, MICROPORT's stock price began a volatile downtrend that lasted for about two months. During this period, the stock price fell from a high of HK$16.28 to a low of HK$9.80, with a maximum fluctuation amplitude of 39.80%. Technically, October 8 last year was the second trading day after MICROPORT's previous rally breached the upper Bollinger Band (BOLL); however, instead of continuing its ascent as the bands expanded upward, the stock price formed a large bearish candlestick the next day, initiating a high-volume decline. The chart shows that from October 9 to November 19 last year, MICROPORT's stock price completed a technical regression from the upper to the lower Bollinger Band in just over a month. Notably, it took only three trading days for the price to fall below the middle Bollinger Band, followed by a sustained volatile decline over the subsequent month, finally touching the lower band on November 19. From a market sentiment perspective, during this downtrend, only the trading volume on October 9 exceeded 50 million shares; subsequently, daily volumes remained consistently sluggish, indicating that potential buyers were holding cash and adopting a wait-and-see approach, reflecting a lack of market support. Internally, there was significant divergence among existing shareholders, and continuous selling pressure resulted in only eight trading days with positive closes for MICROPORT during this interval. The touch of the lower Bollinger Band on November 19 last year is considered a阶段性 bottom for MICROPORT because its average price-to-sales (PS) valuation over the preceding three months was 2.7x, while on November 19 it fell to 2.51x, significantly below the valuation center. At that point, the market capitalization of MICROPORT's parent company was even lower than the equity value of its subsidiaries, signaling clear oversold conditions. After a further two-day decline pushed the PS ratio down to 2.46x, MICROPORT initiated an oversold rebound on November 24. The stock price successively crossed the Bollinger Bands in a volatile manner, touching the upper band on December 29 last year, and has since continued a volatile upward trend within the middle to upper bands until now. The trading activity of Hong Kong Stock Connect funds is noteworthy in MICROPORT's recent "U-shaped" price movement. According to observations, among MICROPORT's broker transactions over the past 60 days, the top five selling seats were Standard Chartered Bank, Citibank, Hong Kong Stock Connect (Shenzhen), Huatai Financial Holdings, and CICC, selling 38.9516 million, 25.8899 million, 21.2719 million, 5.4472 million, and 5.0306 million shares, respectively. On the buying side, Hong Kong Stock Connect (Shanghai) was the largest net buyer, with a net purchase of 50.3573 million shares during the period. Zooming in on the timeline and combining it with Hong Kong Stock Connect shareholding change records, since the latter half of December last year, the shareholding ratio of Hong Kong Stock Connect funds in MICROPORT has noticeably increased. Contrary to their previous strategy of "buying the dip and selling the rally," these funds have opted for right-side trading. Over the past five days, Hong Kong Stock Connect (Shanghai) remained the largest net buyer of MICROPORT, with net purchases of 8.0736 million shares, while Hong Kong Stock Connect (Shenzhen) became the second-largest net buyer, with net purchases of 2.3004 million shares. On January 23, the two Hong Kong Stock Connect channels again ranked as the first and second largest net buyers of MICROPORT, with net purchases of 4.5933 million and 1.5385 million shares, respectively. Data shows that, to date, the average holding cost for Hong Kong Stock Connect funds in MICROPORT is HK$11.23, with an overall profit ratio of 15.46%. In terms of investment strategy for MICROPORT, Hong Kong Stock Connect has shifted from its previous left-side logic to gradually increasing positions following the upward trend. This change essentially reflects a positive outlook on the long-term value of this undervalued company, with gradually improving fundamentals likely being a key factor driving the shift in market investment strategy. In fact, the improvement in MICROPORT's 2025 performance was in line with prior market expectations, but achieving a profit turnaround exceeded expectations. In recent years, a significant reason for the decline in both MICROPORT's stock price and valuation has been the impact of domestic industry policies exerting downward pressure on product prices for its domestic business. Consequently, MICROPORT has been focusing on its overseas operations for performance growth. Taking H1 2025 data as an example, the company's overseas business revenue reached $59.8 million, a year-on-year increase of 57.3%, demonstrating the viability of this business in effectively hedging against pressures such as domestic volume-based procurement. On the other hand, while MICROPORT's H1 2025 revenue was $548 million, representing a slight year-on-year decrease of 2.0%, its net loss narrowed significantly to $36.36 million from $107 million in the same period last year, indicating an operational inflection point. This profit improvement was mainly due to effective cost control: the company's operating expense ratio improved by 8.1 percentage points year-on-year, and its R&D expense ratio decreased from 20.6% to 13.2%. Furthermore, MICROPORT had previously stated in announcements that it aims to achieve specific performance targets: a net loss not exceeding $110 million for H1 2025, a net loss not exceeding $55 million for the full year 2025, a net profit of no less than $45 million for H1 2026, and a net profit of no less than $90 million for the full year 2026. Therefore, based on its solid H1 2025 performance, several brokerages have raised their profit forecasts for the company. For instance, Everbright Securities stated in its latest research report, "Considering the impact of volume-based procurement, the company's efforts to reduce various expenses, and its focus on core businesses, we expect the company to achieve continuous loss reduction. We raise our net profit forecasts for 2025-2026 to -$30 million / $96 million (previous values: -$59 million / $91 million) and introduce a new 2027 net profit forecast of $133 million. As a leading domestic high-value consumables enterprise with strong R&D capabilities, we maintain a 'Buy' rating." The disclosure of an annual profit turnaround in this profit alert clearly exceeded prior market expectations, attracting more investor attention to MICROPORT's subsequent performance trajectory. From this perspective, although the stock price showed a significant surge and retreat on January 23, the single-day trading volume of nearly 80 million shares indicates a notable recovery in market support, suggesting that potential buyers on the sidelines may be transitioning from观望 to acquiring shares.
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