Betters Medical Investment Holdings Limited to raise a maximum of approximately HK$427 million1 by way of Global Offering

Highlights
� One of the leading microwave ablation (MWA) medical device developers and providers in the PRC for minimally invasive treatment of tumours. MWA medical devices are used for treatment of benign and malignant tumours including thyroid nodules, liver cancer, lung cancer and breast lumps.

· The Group ranked first among MWA medical device providers in the treatment for thyroid nodules and breast lumps in the PRC in terms of sales revenue and sales volume of MWA needles in 2021; The Group is the third largest MWA medical device provider in the PRC in terms of sales revenue in 2021.²

· The Group is the first company to have proprietary MWA medical devices specifically indicated for thyroid nodules successfully registered as Class III medical devices.²

· For the five months ended 31 May 2022, 259 hospitals in China procured products of the Group, among which, 150 were Grade IIIA hospitals.

· As at 13 September 2022 (the “Latest Practicable Date”), the Group possessed a total of 27 registered patents in China.

Financial Highlights

For the year ended 31 December				For the five months ended 31 May
?RMB’000?	2019	2020	2021	2021?unaudited?	2022
Revenue	85,029	118,287	188,664	59,605	63,764
Gross Profit	75,987	101,896	156,741	52,122	54,040
(Loss)/Profit before tax expense	(40,718)	62,527	90,940	27,703	26,614
(Loss)/Profit for the year/period	(49,661)	46,692	74,857	22,133	21,146

HONG KONG SAR – Media OutReach – 21 September 2022 – Betters Medical Investment Holdings Limited (“Betters Medical” or the “Company”, together with its subsidiaries, the “Group”, stock code: 6678.HK), one of the leading microwave ablation (MWA) medical device developers and providers in the PRC, announces the details of its plan to list on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”) today.

A total of 248,000,000 shares (subject to the Over-allotment Option) will be offered under the Share Offer, of which 90%, or 223,200,000 shares (subject to reallocation and the Over-allotment Option), will be offered by way of International Placing; while the remaining 10%, or 24,800,000 Shares (subject to reallocation) will be offered under the Hong Kong Public Offer. The Offer Price per Offer Share is expected to be not less than HK$1.40 and not more than HK$1.72. The Hong Kong Public Offer will commence at 9:00 a.m. on 22 September 2022 (Thursday) and close at 12:00 noon on 27 September 2022 (Tuesday). The final offer price and allotment results are expected to be announced on 3 October 2022 (Monday). Dealings in shares of Betters Medical on the Main Board of the SEHK are expected to commence on 5 October 2022 (Wednesday).

Assuming an Offer Price of HK$1.56 per Offer Share (being the mid-point of the indicative price range of the Offer Price), the aggregated net proceeds from the Share Offer, after deducting related expenses and assuming the Over-allotment Option is not exercised, will be approximately HK$300.2 million. The Group intends to use these net proceeds for the following purposes: 1) approximately 41.0% for broadening and deepening product portfolio, upgrading medical licences and expanding R&D team; 2) approximately 38.0% for selectively pursuing strategic acquisitions, investment or synergistic business cooperation opportunities; 3) approximately 8.0% for expanding presence in foreign and emerging markets by setting up overseas offices; 4) approximately 3.0% for acquiring automated machineries and equipment to improve the automation level of production lines; and 5) approximately 10.0% for additional working capital and other general corporate purposes.

BOCI Asia Limited and Zhongtai International Capital Limited are the Joint Sponsors. BOCI Asia Limited, Zhongtai International Securities Limited, China Galaxy International Securities (Hong Kong) Co., Limited and Cinda International Capital Limited are the Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers. Huatai Financial Holdings (Hong Kong) Limited, Eddid Securities and Futures Limited, China Everbright Securities (HK) Limited, Guosen Securities (HK) Capital Company Limited, China Industrial Securities International Capital Limited and Valuable Capital Limited are the Joint Bookrunners and Joint Lead Managers. ZMF Asset Management Limited are the Joint Lead Manager.

Business Overview

The Group is one of the leading MWA medical device developers and providers in the PRC for minimally invasive treatment of tumours. The proprietary MWA medical devices of the Group are used for treatment of benign and malignant tumours including thyroid nodules, liver cancer, lung cancer and breast lumps, which have experienced rising incidence rates in China. According to Frost & Sullivan, the Group is first company to have its proprietary MWA medical devices specifically indicated for thyroid nodules successfully registered as Class III medical devices. As at the Latest Practicable Date, the Group had obtained the Class III medical device registration certificate for its MWA medical devices specifically indicated for liver cancer and thyroid nodule.

According to Frost & Sullivan, the Group ranked first among MWA medical device providers in the treatment for thyroid nodules and breast lumps in the PRC in terms of sales revenue and sales volume of MWA needles in 2021; the Group is the third largest MWA medical device provider in the PRC in terms of sales revenue in 2021.

During the Track Record Period, all revenue of the Group was derived from China. Products of the Group are ultimately sold to hospitals for end consumption by their patients. These hospitals were mostly Grade II and Grade III hospitals across 22 provinces, municipalities and autonomous regions in China. For the five months ended 31 May 2022, 259 hospitals in China procured products of the Group, among which, 150 were Grade IIIA hospitals.

The Group experienced a strong growth in financial results during the Track Record Period. For the year ended 31 December 2019, 2020 and 2021, revenue of the Group was approximately RMB85.0 million, RMB118.3 million and RMB188.7 million respectively, which record a CAGR of 49.0%. The Group turned from a net loss of RMB49.7 million for FY2019 to a net profit of RMB46.7 million and RMB74.9 million for FY2020 and FY2021, respectively. For the five months ended 31 May 2022, revenue and net profit of the Group was RMB63.8 million and RMB21.1 million respectively.

Competitive Strengths

1. One of the leading MWA medical device developers and providers in the PRC for minimally invasive treatment of tumours in a fast-growing and underserved MWA medical device market in China

From 2016 to 2021, the market size of China’s tumour ablation industry in terms of hospital charge price has increased from RMB1.9 billion to RMB4.1 billion and is expected to reach RMB14.7 billion in 2026 with a CAGR of 30.6% from 2022 to 2026. MWA is the largest sector of tumour ablation therapy market in China, contributed to 57% of the overall ablation market. According to Frost & Sullivan, the Group ranked first among MWA medical device providers in the treatment for thyroid nodules and breast lumps in the PRC in terms of sales revenue and sales volume of MWA needles in 2021. MWA medical devices of the Group primarily target specialty areas with significant efficacy with MWA technology and with substantial market growth potential including both (i) benign tumours with a particular focus on thyroid nodules and breast lumps; and (ii) malignant tumours with particular focus on liver cancer and lung cancer.

2. Established a solid and strategically managed sales and distribution network

The Group have a solid and strategically managed sales and distribution network across China. For the five months ended 31 May 2022, products of the Group have been sold directly, through deliverers and on-sold by distributors to 259 hospitals across 22 provinces, municipalities and autonomous regions in China. With the network of deliverers and distributors, the number of hospitals in China purchasing products of the Group increased from 258 for FY2019 to 303 for FY2021, among which the number of Grade IIIA and Grade IIIB hospitals increased from 149 to 177. According to Frost & Sullivan, there are a total of 10 hospitals in Guangdong Province that are listed as the top 100 hospitals in the PRC issued by the Hospital Management Institute of Fudan University* (???????????) in 2020, and the Group have managed to sell the products to six of them during the Track Record Period.

3. Established relationship with market participants which greatly enhances R&D capabilities

The Group is the first company to have proprietary MWA medical devices specifically indicated for thyroid nodules registered as Class III medical devices, according to Frost & Sullivan. Also, the Group had obtained (i) one registration certificate for Class III medical devices and (ii) two registration certificates for Class II medical devices. Its products have wide application to different tumours including both (i) benign tumours with a particular focus on thyroid nodules and breast lumps; and (ii) malignant tumours with particular focus on liver cancer and lung cancer. As at the Latest Practicable Date, the Group possessed, as sole owner or co-owner, a total of 27 registered patents in China, and have made applications for 20 additional patents.

4. One of the leading players in the MWA medical device industry who add value to stakeholders in the value chain

MWA is one of the available treatment options of certain types of benign and malignant tumours that has the advantage of being safe, minimally invasive and easy to operate with a rapid recovery and low complication rate for patients. MWA treatments can also prevent a benign tumour from developing to a malignant tumour and therefore preventing cancer at early stage.

For hospitals, MWA medical devices of the Group provide them with a surgical alternative to conventional open surgery and chemotherapy for some of the patients who are suitable for undergoing MWA treatment. Patients undergoing MWA treatment also require less observation period and stay period (if any) post operation. Therefore, hospitals providing MWA treatment, thereby reducing the number of open surgery or chemotherapy patients, can reduce burden on hospital capacity; For medical practitioners, MWA medical devices of the Group provide them with a surgical alternative to tumour treatment for the patients. MWA treatment requires relatively short operation time and involves relatively low risk as compared to open surgery. In addition, MWA medical devices of the Group are currently covered by the national medical insurance in Guangdong Province and the reimbursement rate is up to 80% of the total fee for employee insurance and up to 60% of the total fee for rural insurance, which can further decrease the payers medical expenses reimbursement.

5. A visionary and experienced management team with proven track record

The Group has an experienced, dedicated and stable management team, with deep industry knowledge and management expertise that have contributed to our success so far. The Group is led by a management team who has rich working experience in medical companies. Senior management team of the Group includes members with background in accounting, R&D and merchandising. The Group believes that its leadership team, with their strong management talent, and the utilisation of its vast distribution networks and industry experience, will help the Group sustains an organic growth and future development.

BUSINESS STRATEGIES

1. Selectively pursue strategic acquisitions or investment

The Group plans to actively seek suitable opportunities for strategic acquisitions, investment or synergistic business cooperation to grow the business, expand product portfolio, enhance sales and distribution network and strengthen R&D capabilities to further consolidate market position. The Group believes there are ample opportunities, including companies that offer laser ablation products and technologies, companies that offer MWA products and technologies (including microbubble ultrasound cavitation enhanced MWA products and technologies), companies that focus on the development of AI and are in possession of the relevant products and technologies. Directors of the Group confirm that as at the Latest Practicable Date, they had not identified any specific acquisition target, formed any specific acquisition plan or entered into any agreement with potential target.

2. Broaden and deepen product portfolio, upgrade medical licences and expand R&D team

R&D staff of the Group will continue to broaden and deepen product portfolio, in a bid to strengthen the position in the MWA medical device market. The Group plans to expand the coverage of its Class III medical device registration certificates for its proprietary MWA medical devices specifically indicated for breast lumps, pulmonary nodules, varicose vein, bone tumours, uterine fibroid, prostate cancer and other diseases. The Group also plans to study, research on and develop MWA intelligence, as well as to launch new products in the underserved and fast growing MWA medical device market in the PRC.

3. Expand the presence in foreign and emerging markets by setting up overseas offices

The Group intends to tap into suitable overseas markets such as the U.S. and Europe that it believes are with good market growth potential by establishing overseas offices to implement its business development strategy and seek collaboration opportunities with local sales channels. The Group will conduct market research on the tumours ablation therapy markets in Europe and the U.S. and formulate a concrete overseas marketing plan in 2023; the Group intends to start cooperating with renowned overseas medical experts and professors to promote its brand and products in the overseas markets in the second half of 2023; expects to set up overseas office and recruit overseas sales and marketing staff for sales and after-sale services in the first quarter of 2024.

To promote brand name overseas, the Group will participate in prominent international medical conferences, such as China International Medical Equipment Fair (???????????), MEDICA and Florida International Medical Expo (FIME) to promote our products and build our brand reputation among influential KOLs and major medical associations in the MWA field of our targeted overseas markets.

4. Acquire automated machineries and equipment to improve the automation level of our production lines

To increase standardisation of production process and production efficiency, the Group plans to automate certain production steps by installing various types of automatic machineries and equipment in the Nanjing Plant 2 and the Suzhou Plant. The Group will provide training to its production staff on the operation of the new machineries and equipment and the automated production process. In addition, Directors believe that improved automation in the production process will enhance operational efficiency, strengthen capacity in producing highly standardised quality MWA medical devices, and increase the recognition of their proprietary MWA medical devices among medical practitioners.

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About the Betters Medical Investment Holdings Limited

Betters Medical Investment Holdings Limited is one of the leading microwave ablation (MWA) medical device developers and providers in the PRC for minimally invasive treatment of tumours. Proprietary MWA medical devices of the Group are used for treatment of benign and malignant tumours including thyroid nodules, liver cancer, lung cancer and breast lumps, which have experienced rising incidence rates in China. According to Frost & Sullivan, the Group is the first company to have proprietary MWA medical devices specifically indicated for thyroid nodules successfully registered as Class III medical devices; ranked first among MWA medical device providers in the treatment for thyroid nodules and breast lumps in the PRC in terms of sales revenue and sales volume of MWA needles in 2021; the third largest MWA medical device provider in the PRC in terms of sales revenue in 2021.