FAST NEWS: PW Medtech plans to spin off unit for separate listing

The Latest: Medical device maker PW Medtech Group Ltd. (1358.HK) announced Monday that it is considering spinning off its non-wholly owned subsidiary Sichuan Ruijian Medical for a separate listing on the Beijing Stock Exchange.

Looking Up: The company believes such a spinoff will unlock shareholder value and help establish a fair value for Sichuan Ruijian, as well as provide the company with direct access to the domestic capital market, enhancing its financing capabilities.

Take Note: The Beijing market where Sichuan Ruijian would trade is an over-the-counter market for small and medium-sized enterprises, with relatively low trading volumes. Many Chinese companies have previously delisted from the market due to low turnover.

Digging Deeper: PW Medtech makes and sells high-end infusion devices, intravenous indwelling needle products and insulin needles mostly for use in hospitals. Demand for such products weakened during the pandemic, causing its revenue to fall in 2020 and 2021. However, with the Chinese government promoting domestic production of medical devices and a continued rebound in demand for its products, its business resumed growing from 2022 onwards and hit a new high of 675 million yuan ($93.8 million) in revenue last year.

Market Reaction: PW Medtech shares didn’t move too much in early Tuesday trade, and closed unchanged at HK$1 by the midday break. They now trade near the upper end of their 52-week range.

Translation by A. Au

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