Tinavi (天智航, 688277.SH), China’s leading surgical robot manufacturer, has again proved its attractiveness to investors and the market potential of orthopedic surgical robot in the fast-graying country, after it disclosed the results of its private placement deal.
On the evening of March 2, the firm, which is the country’s first surgical robot maker to monetize its know-how, said it raised a total of 370.20 million yuan (US$53.13 million) in the non-public sale of some 29.54 million shares to a group of pre-selected investors, including UBS AG, Nuode Fund, Shui Wah Investment and Taikang Asset.
Oversubscribed by investors, Tinavi’s private placement was eventually priced at 12.53 yuan per share, 12.28% more than the original bottom price (11.16 yuan) set for the offering.
JPMorgan Chase, Nuode Fund, Shui Wah Investment and several high-net-worth individuals submitted bids of over 13 yuan per share.
Finally, 11 bidders hit the jackpot among a pool of investors, such as National Association, Caitong Fund, Hefei Haiheng International Logistics, aside from the aforementioned UBS AG, Shui Wah and so on.
According to Tinavi, funds from the offering will be used to build a R&D, distribution and maintenance system compatible with its existing product series TiRobot, TiRobot II and joint surgical robot.
This system will be pivotal to constructing an ecosystem with an orthopedic surgical robot platform at its core. It also is designed to expand the firm’s product pipeline and consolidate its leading position.
Tinavi went public on July 7, 2020, on the Shanghai Stock Exchange, becoming the first domestic surgical robot developer to be listed.
Market enthusiasm over the private placement testifies to the bullish outlook on China’s orthopedic surgical robot sector.
Over the past few years, as the nation’s population ages rapidly, the incidence of orthopedic diseases is getting higher. According to a white paper on osteoporosis among Chinese citizens, about 55% of people above 60 have joint disorders, and the percentage is even higher for those 70 and older, at 70%.
Driven by surging needs for assistive devices in procedures on joint implant, spinal cord and bone fracture, China’s surgical robot segment has gained momentum.
According to Frost & Sullivan, the market for surgical robot worldwide grew by a CAGR of 22.6% from US$3 billion in 2015 to US$8.3 billion in 2020. On current trends, its size is forecast to reach US$33.6 billion in 2026 from 2020, with a CAGR of 26.2%.
A breakdown of the numbers shows that Western countries took 76.5% of the global market in 2020, while China, despite its sheer population size, represented a mere 5.1%. The country’s orthopedic surgical robot industry is projected to hit US$3.8 billion in 2026, averaging a CAGR of 44.3%.
Nonetheless, the competition for a bigger market share will be an uphill battle. At home, Tinavi finds itself up against domestic counterparts MicroPort (微创医疗, HK: 0853), Wego (维高集团), Rossum Robot (罗森博特) and more entrenched foreign incumbents like Stryker, Medtronic, Smith+Nephew, Zimmer Biomet and Johnson & Johnson.