Documents of Shanghai Stock Exchange

SSE Section Review (Refinancing) [2023] No. 24

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Enquiry Letter

Shanghai Minimally Invasive Xinmai Medical Technology (Group) Co., Ltd., China International Finance Co., Ltd:

According to the "Securities Law", "Measures for the Administration of Securities Issuance and Registration of Listed Companies on the Science and Technology Innovation Board (Trial)", "Shanghai Stock Exchange Science and Technology Innovation Board Listed Companies Securities Issuance and Listing Review Rules" and other relevant laws, regulations and relevant regulations of the Exchange, The review agency reviewed the application documents of Shanghai Minimally Invasive Xinmai Medical Technology (Group) Co., Ltd. (hereinafter referred to as the issuer or company) to issue stocks to specific targets, and formed the first round of inquiry questions.

1. On the necessity of this fund-raising project

According to the application materials, 1) The global headquarters and innovation and industrialization base project will establish a base integrating production, research and development, and office in the Shanghai International Medical Park, and expand the existing aortic stent system, intraoperative stent system, etc. While the product production capacity, it is planned to produce a variety of brand-new peripheral vascular and tumor interventional medical devices, there are some products that are still in the research and development process and have not obtained a registration certificate or have not completed other pre-market licensing, certification, filing and other procedures. 2) The research and development project of peripheral vascular intervention and tumor intervention medical devices intends to transform the existing site, purchase software and hardware equipment required for research and development, and develop point stents, thrombolytic catheters, and biodegradable microspheres in the field of peripheral vascular intervention and tumor intervention New products. 3) The previous fundraising projects include the industrialization project of aortic and peripheral vascular interventional medical devices, the research and development project of aortic and peripheral vascular interventional medical devices, and the marketing network and information construction project. 4) The research and development project of peripheral vascular intervention and tumor intervention medical devices is in the pre-research stage, and the raw materials and specific processes involved in the research and development products have not been fully determined. Based on the existing research and development situation, there is no need to go through the environmental impact assessment procedures of construction projects.

The issuer is requested to make supplementary disclosure of the prospectus in accordance with Article 11 of the "Guidelines on the Content and Format of Information Disclosure by Companies Offering Securities to the Public No. 44-Prospectus and Report on Issuance of Securities by Listed Companies on the CRE Board to Specific Objects.

The issuer is requested to explain:(1) The specific content of this fundraising project plan, the difference and connection between the existing business and the previous fundraising project, whether there is a distinction between the R & D functions between the two fundraising projects, whether it is a duplication of construction, and the consideration of the layout of fundraising projects;(2) The classification and management of the products to be produced in the global headquarters and innovation and industrialization base projects, the latest progress and future planning of the products under research, the experimental data or results (if any) obtained, the communication with the competent authorities, and the relevant requirements for the implementation of the fund-raising project.

The application and acquisition of registration, licensing, filing, etc. or the expected completion time, whether there are major uncertainties in the project, and the response measures for product research and development failure;(3) Combining the corresponding market space of each product of the global headquarters and innovation and industrialization base project, The issuer's market share, the advantages and disadvantages compared with competing products, the use habits of doctors, the capacity utilization rate during the reporting period, etc, analyze the rationality of production expansion on the basis of existing and planned production capacity and the adequacy of capacity digestion measures;(4) The products of peripheral vascular intervention and tumor intervention medical device research and development projects may involve raw materials and processes, Whether it is necessary to go through the EIA procedures, whether there are risks and countermeasures that cannot be obtained, and whether there are uncertainties in the composition, implementation, and research and development results of the project.

The sponsor is requested to verify and express a clear opinion on the above matters, and the issuer's lawyer is requested to verify and express a clear opinion on (4).

2. Measurement of the scale and benefits of financing

According to the application materials, 1) the proposed issuance of shares to specific targets for financing does not exceed 2,546.8393 million yuan, which is planned to be used for "global headquarters and innovation and industrialization base project" and "peripheral vascular intervention and tumor intervention medical device research and development project" respectively 1830.7978 million yuan and 516.0415 million yuan; 2) the amount of funds raised this time to supplement working capital is 200 million yuan; 3) at the end of the reporting period, the total assets of the company are 1893.2176 million yuan, the scale of this financing significantly exceeded the total assets; 4) At the end of the reporting period, the company's monetary funds were 1,040.5676 million yuan.

The issuer is requested to explain:(1) the specific content and measurement process of engineering construction, equipment purchase, research and development investment, the basis for determining the construction area and the number of equipment purchases, and the matching relationship with the new production capacity; combined with the design of the new research and development building Planning, per capita area, specific use, explain whether the construction area matches the company's business and personnel size,

Analyze the necessity and rationality of the scale of this new R & D building;(2) Combined with the specific identification of R & D investment, explain the scale of this fundraising actually used to supplement the flow, and whether the relevant proportion exceeds the total amount of this fundraising 30%;(3) Combining the issuer's existing fund balance and specific use, fund gap, etc., explain the rationality and prudence of this financing when the company has large funds;(4) Benefit measurement, including the basis for determining key measurement indicators such as unit price, sales volume and gross profit margin, whether the measurement is prudent, and the comparison with existing similar products and comparable companies in the same industry;(5) Whether the investment composition of the raised funds has been invested before the consideration of the board of directors.

Sponsors and reporting accountants are requested to:(1) verify and express clear opinions on the above matters;(2) verify and express clear opinions in accordance with Question 4 of the Questions and Answers on the Issuance and Listing of Securities of Listed Companies on the Science and Technology Innovation Board;(3) Check and express clear opinions in accordance with Question 22 of the Answers to Several Questions on Refinancing Business.

3. Regarding the previous fundraising project

According to the application materials, 1) in July 2019, the company's initial public offering raised net funds.

The amount was 729.6589 million yuan, and the overall investment progress at the end of the reporting period was 61.85%, of which the investment progress of the non-over-raised part was 62.25%;2) In March 2021, the company changed the use of some of the raised funds for investment projects, the unused raised funds and their fruits of the original project "Aortic and Peripheral Vascular Interventional Medical Device Industrialization Project (Kangxin Highway)" totaled 146.5548 million yuan for the "Aortic and Peripheral Vascular Interventional Medical Device Industrialization Project (Stacked Bridge Road)".

The issuer is requested to explain:(1) the reasons for the above-mentioned change in the use of the raised funds and the current construction progress, before and after the change of use, the proportion of non-capital expenditure used in the previous raised funds to the raised funds;

In line with expectations, whether the funds raised are invested as planned, and whether there are significant uncertainties in the implementation of the project.

The sponsor and the reporting accountant are requested to verify and express a clear opinion.

4. On related transactions, peer competition

According to the application materials, 1) Minimally Invasive Medical is the indirect controlling shareholder of the issuer. During the reporting period, the company purchased raw materials such as film coating, pipes and production and research and development equipment from Minimally Invasive Medical subsidiaries and joint ventures such as Maitong Technology, MPI and Shanghai Minimally Invasive. There are Limited transactions between the company and related party Lombard Medical to sell products and purchase raw materials. There is a failure to identify the transaction as a related party transaction in time. 2) At the same time, minimally invasive medical subsidiaries and associates are the largest suppliers of issuers in 2019-2021. 3) The issuer's indirect controlling shareholder, Minimally Invasive Medical, is a leading medical device enterprise group in China. In addition to the aortic and peripheral vascular interventional products business segment engaged by the issuer, other enterprises controlled by Minimally Invasive Medical are also engaged in the business of cardiovascular interventional devices and neural interventional products. This fundraising project includes tumor interventional business.

The issuer is requested to explain:(1) The necessity of related transactions during the reporting period, the standardization of information disclosure, the fairness of related transaction prices, whether there is any non-correlation of related transactions, the relevant rectification and whether it affects the issuance conditions;(2) Whether the issuer's procurement is dependent on minimally invasive medical care, and whether there is a situation where the controlling shareholder bears the cost;(3) After the implementation of the fund-raising project, whether there will be new inter-industry competition and obviously unfair related transactions with the controlling shareholder, the actual controller and other enterprises controlled by them.

The sponsor, the issuer's lawyer and the reporting accountant are requested to combine the Shanghai Securities Exchange.

Question 6 of the Questions and Answers on the Review of the Issuance and Listing of Securities of Listed Companies on the CRE Board will be verified and a clear opinion will be expressed.

5. About the company's business and operation

5.1 According to the declaration materials, 1) for domestic sales, the company will issue goods and be issued

The customer or the transportation company designated by the customer shall confirm the sales revenue after confirmation; For export sales, the company shall confirm the revenue after the products are delivered from the warehouse or the exported products are handled for export customs declaration, and the bill of lading is obtained or signed by the buyer. 2) During the reporting period, the sales proportion of the company's top five customers was 33.93%, 43.66%, 53.98% and 67.74% respectively, showing an upward trend. The company mainly adopts the distribution mode for sales; (3) At the end of each period of the reporting period, the project cooperation fees in other payables of the Company were 6.6013 million yuan, 14.6808 million yuan, 25.0684 million yuan and 5.3908 million yuan respectively, and the Company had cooperative research and development with Shanghai Minimally Invasive and Zhongshan Hospital affiliated to Fudan University.

The issuer is requested to explain:(1) Whether the revenue recognition method, time point and specific basis of the company's different businesses or products meet the relevant requirements of the Accounting Standards for Business Enterprises;(2) Combined with the sales model, explain the company's top five during the reporting period Reasons for the increase in the concentration of customers, whether large distributors have been added, and the return and exchange of the company's products by distributors;(3) The content, mode, duration and amount of the company's cooperative research and development with relevant institutions, the specific impact on the company's main business and the fund-raising project, and the accounting basis for the project cooperation fee.

5.2 According to the filing materials, 1) the issuer is mainly engaged in aortic and peripheral vascular mediators.

In the field of research and development, production and sales of medical devices, the future will continue to launch aortic interventional medical device products, and actively expand and improve the layout in the field of peripheral blood vessels and future tumor intervention. 2) The important industry policies involved by the issuer include centralized volume procurement.

policy, DRG/DIP payment policy, "two-vote" policy, etc. (3) During the reporting period, the amount and proportion of the issuer's overseas business income increased year by year, with the latest period being 38.7868 million yuan, accounting for 5.84 percent of the main business income, and in 2022, two overseas subsidiaries, Dutch Heart Pulse and American Heart Pulse, were established, and some of the company's raw materials were imported from Europe, America and other countries or regions.

Please explain to the issuer:(1) The development and advanced level of the issuer's tumor intervention related technologies, whether there is a big difference between the commercialization path of related products and aortic and peripheral vascular intervention, and the future development of different types of products Planning;(2) Whether policies such as volume procurement, DRG/DIP payment, and the "two-vote system" will have a significant adverse impact on the issuer and the countermeasures that the issuer intends to take;(3) Analyze whether the growth of overseas revenue is sustainable and the impact of changes in the current domestic and foreign trade environment on the company's business and procurement based on the planning arrangements for future overseas business.

The sponsor is requested to verify and express a clear opinion on the 5.1-5.2 issue, and the reporting accountant is requested to verify and express a clear opinion on the 5.1 issue.

6. Other

6.1 According to the filing materials, 1) At the end of the reporting period, the Company's long-term equity investment was

128.8423 million yuan, other non-current assets of 24.4824 million yuan; 2) At the end of the reporting period, the company had some domestic and foreign subsidiaries.

The issuer is requested to explain:(1) the new and proposed financial investments from the six months prior to the resolution of the board of directors of the issuance to the date of the issuance.(2) Analyze whether the company meets the requirement that there is no large amount of financial investment in the latest period, taking into account the relevant investment situation.

The reporting accountant is requested to verify and express a clear opinion in conjunction with Question 15 of "Several Questions on Refinancing Operations.

6.2 According to the filings, the lease term of some of the issuer's leased properties has expired

or is about to expire.

The issuer is requested to explain whether the use of the property leased by the issuer and whether the expiration or impending expiration of the lease term of some of the property affects the stability of the issuer's production and operation.

Ask the sponsor and the issuer's lawyer to verify and express a clear opinion.

6.3 According to the filing materials, there are more changes in the senior management of the issuer after the listing,

Involving the general manager, deputy general manager, secretary of the board of directors, chief financial officer, etc.

The issuer is requested to explain: the reasons and reasonableness of the relevant personnel changes, whether there are circumstances affecting their qualifications, and whether they have a material adverse impact on the stability of the issuer's governance and operations.

Ask the sponsor and the issuer's lawyer to verify and express a clear opinion.

The company is requested to distinguish between "disclosure" and "explanation" matters. In addition to applying for exemption, the disclosure content should be added to the prospectus. The explanation content is the content of the inquiry reply and does not need to be added to the prospectus. If the application documents such as the revision of the prospectus are involved, the update shall be marked in italics and bold, and the revision explanation and difference comparison table shall be submitted together. The sponsor is requested to carefully check the company's reply item by item by item, and after the company's reply, it is stated that "the agency has verified the company's reply in this reply material to confirm and ensure its truthfulness, completeness and accuracy.

Shanghai Stock Exchange

February 10, 2003

Subject headings: Inquiry Letter on the Refinancing of the CRE Board

Shanghai Stock Exchange Science and Technology Board Listing Audit Center issued on February 10, 2023.