The lifting of the ban on restricted shares tested the fundamentals of Tianxing Healthcare (01609), and the valuation entered a reasonable range as performance continued to grow

Tianxing Healthcare (01609), known as “the first domestic sports medicine stock in Hong Kong”, is about to face new challenges after its stock price breaks.

On May 5, 2026, Tianxing Medical was successfully listed and traded on Hong Kong stocks at a price of HK$98.5 per share. The highest intraday increase was HK$299, the biggest increase of 203.55%. Although the closing increase declined, it still recorded an increase of 118.27%, gaining “attention” in the market on the first day of listing.

However, Star Healthcare's stock price continued to decline since the second trading day. After a sharp drop of 15.30% on September 30, it hit a record low of HK$74.50. This was 75.08% lower than the highest price of HK$299 and 24.37% lower than the issue price.

At a time when stock prices have reached a record low, the upcoming lifting of the ban on restricted shares will become another challenge that Tianxing Healthcare needs to face. The Zhitong Finance App observed that the ban on 2,922,900 restricted shares held by Tianxing Healthcare's four cornerstone investors will be officially lifted on November 5. Such shares account for 34.7% of global sales and 5.34% of the company's total issued share capital. Based on the closing price of HK$75.55 on September 30, the total market value of these 2,922,900 shares is approximately $221 million.

For Tianxing Healthcare, the lifting of the ban on restricted shares brought about by low stock prices is more like a “stress test” for liquidity. Investors can't help but wonder how Tianxing Healthcare's stock price will perform after this incident comes to fruition?

The cornerstone is the overall allocation of industries, and the impact may be limited to the emotional level

To understand the actual impact of the lifting of the restricted stock ban on the company's stock price, we also need to start with the source of Tianxing Medical's stock price performance after listing. From the high performance on the first day of listing to the current collapse, this is actually the result of the combination of overheated market sentiment, small circulation, and overdraft valuation levels, and the four major factors of value return.

The “enthusiasm” of market capital for Tianxing Healthcare was actually reflected as early as the IPO stage. The Zhitong Finance App observed that Tianxing Medical sold a total of about 8.4219 million H shares during the IPO, accounting for about 15.36% of the company's total share capital. Among them, the number of publicly offered shares was about 842,200, accounting for 10% of the shares offered, and the number of internationally placed shares was about 7.5797 million shares, accounting for 90% of the shares offered.

According to the distribution results announcement, the public sale of Tianxing Medical was oversubscribed by 7823.13 times, and the subscription was 10.41 times under the international placement, which indicates that both retail investors and institutions are rushing to raise funds for Tianxing Healthcare. In particular, in the public sale, since the issuance using mechanism B was not refunded, only 842,000 chips caused an extreme imbalance between supply and demand, resulting in an oversubscription of more than 7,000 times.

It is worth noting that although Tianxing Medical's shares in this sale account for 15.36% of the company's total share capital, the actual amount of chips that can be distributed after the listing transaction is limited, and the thin market characteristics are obvious. Since Tianxing Medical introduced 4 cornerstone investors in the international placement, it subscribed for a total of about 2,922,900 shares, accounting for 38.56% of the international placement shares and 34.70% of the total shares offered.

This means that after listing, actual tradable chips accounted for 65.3% of the total shares sold and about 10% of the company's total share capital, or 5.499 million H shares. Based on the offering price of HK$98.50 per share, the actual marketable market value is only about HK$540 million.

On the basis of high market sentiment and a smaller circulation market, the dominant international placement investors quickly cashed out in profits after quickly drawing extremely high increases and successfully attracted market attention.

On the first day of listing, Tianxing Medical opened at a price of HK$288, corresponding to an increase of 192.39%, then rose to a maximum of HK$299 within two minutes, more than double the issue price. Following a rapid dive in stock prices, the increase fell back to 103% at the end of the session, and finally closed with an increase of 118.27%, with a full-day turnover of HK$918 million.

Even though the increase declined significantly on the first day of listing, the market value of Tianxing Medical was still as high as HK$11.78 billion at the time, and the valuation was still clearly too high. This can be confirmed by data. In 2025, Tianxing Medical's revenue was about 403 million yuan, adjusted net profit was about 154 million yuan, PS valuation corresponding to a market value of HK$117.80 was about 26.8 times, and PE valuation was about 70.2 times.

As a comparison, the TTM PE of Hong Kong stocks Chunli Healthcare, Elken Healthcare, and Weigao shares during the same period was only 9-12 times, and Guichuang Tongqiao was about 20 times higher, all significantly lower than the valuation level of Tianxing Healthcare. Under such a valuation system, it is inevitable that Tianxing Healthcare will evolve from excessive valuation to a return to value.

Since Tianxing Medical did not set up a “green shoe” mechanism, the stabilization force was weak and the decline was smooth. After 5 months of continuous decline, Tianxing Medical's stock price hit a record low of HK$74.25 per share on October 2, down 24.62% from the issue price, and the market value has dropped to around HK$4.1 billion.

In fact, stock prices, which continue to fall, have already set a price for the upcoming lifting of the ban on restricted shares. However, judging from the nature of the cornerstone, the impact of this incident on Tianxing Medical's stock price may only be on an emotional level.

The Zhitong Finance App observed that Tianxing Healthcare introduced a total of 4 cornerstone investors in the international placement, of which JSC International holds about 3.59% of the company's total share capital. This cornerstone represents Yi Tang Shenghai. Behind it are state-owned assets from Yizhuang International and the Beijing Economic Development Zone, which are biased towards industrial capital attributes.

Aobo Asia Phase IV holds about 0.73% of the shares. This cornerstone is a global medical VC and an old shareholder. It has “professional medical investment+industrial collaboration” attributes, but also has financial return claims; the Greater Bay Area Development Fund holds a total of about 1.02% of the shares through the two accounts. This cornerstone focuses on science and technology innovation and biotechnology in the Bay Area, and the regional industrial allocation.

It can be seen from this that the cornerstone of Tianxing Healthcare is mainly industry/state-owned endorsements, and is not a pure short-term arbitrage player. In the current temporary loss situation, cornerstone investors leaving the market at a low level will only cause greater losses due to unbearable liquidity. Whether judging from capital metallicity or cost to benefit ratio, this is not a rational exit window.

Moderate growth is deterministic, and fundamentals drive low stock prices and are supported

If the impact of the upcoming cornerstone ban lifting on Tianxing Medical's stock price may be limited to the emotional level, then the continued rapid growth of the performance is the core pillar underpinning Tianxing Medical's low stock price.

According to the data, from 2023 to 2025, Tianxing Medical's revenue was about 239 million yuan (RMB, same below), 327 million yuan, and 403 million yuan, with a compound annual growth rate of about 30%; adjusted net profit for the same period was 58.017 million, 964.72 million yuan, and 154 million yuan respectively, with a compound annual growth rate of 62.94%. This is an impressive report card of high revenue growth and profit side explosion.

However, the continued increase in revenue is mainly supported by three major logics: the first is that the admission logic of domestically produced sports medicine has been implemented through collection. In the past, this track was controlled by foreign investors such as Shi Rohui, Johnson & Johnson, and Stryker. Even though domestic products were cost-effective, it was difficult to get into the top three, and it was difficult to get reports. After the national collection of high-value sports medicine consumables was launched in 2024, Tianxing Medical won the bid. The average price was reduced from 712 yuan/piece in 2023 to 437 yuan/piece in 2025. The revenue per piece has shrunk markedly, but the collection directly opened up the hospital procurement channel. Sales jumped from 262,000 pieces to 560,000 pieces and then 710,000 pieces It has increased nearly 1.7 times in two years.

This is not a simple “price for volume”. Instead, Tianxing Medical exchanged the winning bid for rewards and admission places that were not available in the past, and then used differentiated models such as full-stitched anchors, PEEK interface screws, and absorbable fixings to maintain clinical stickiness, and actually eat up the share given away by foreign investment. From 2023 to 2025, Tianxing Medical's implant product revenue was 187 million, 250 million, and 310 million respectively, accounting for 78.2%, 76.4%, and 77.1%. This product became a key driving force for revenue growth.

Second, while the volume of implants is being released at an accelerated pace, equipment and consumables continue to increase the output of a single hospital. Equipment such as arthroscopy, plasma ablation, and wireless planing itself did not make much money after entering the hospital, but tied up the hospital surgical scene. Subsequently, anchors, stitches, tool kits, and disposable blades will continue to be repurchased. This has driven equipment and consumables revenue to rise all the way from 52 million to 92 million in 2023, and the proportion has continued to remain above 20%.

Third, overseas markets have also become a new growth curve. In 2023, Tianxing Medical's overseas revenue was only 6.67 million yuan, accounting for 2.8%. In 2025, it has already reached 70.27 million yuan, accounting for 17.4%. This relies on Tianxing Medical entering the European, Southeast Asian, Middle Eastern, and Latin American markets by obtaining registration certificates country by country and implementing local distribution, and using a mid-range price+complete product matrix to make up for the loss of growth in domestic procurement pressure prices.

It can be seen from this that it was only after the three lines of volume increase bottom-up, equipment bugging, and overseas hedging were combined that Tianxing Medical was able to achieve a high revenue growth rate that did not rely on price increases or money consumption during the collection cycle where average prices declined.

There are two main key reasons why the adjusted net profit growth rate of Tianxing Medical far exceeded the revenue side from 2023 to 2025. The first is a marked recovery in gross margin in 2025. Although the overall gross margin fell from 74.3% to 69.6% after the national collection of high-value sports medicine consumables was implemented in 2024, in 2025, thanks to effective cost management and economies of scale, gross margin rebounded to 74.1%, and profitability stabilized.

Second, channel costs were diluted after collection and release, and the continuous decline in the share of sales expenses accelerated the release of the profit side. According to the data, from 2023 to 2025, Tianxing Medical's three-fee expenses accounted for 50.96%, 44.11%, and 40.90% respectively. Of these, sales and distribution expenses accounted for 27.72%, 22.81%, and 20% respectively, which became the key force driving the decline in three-fee expenses.

Entering the first half of 2026, the operating side of Tianxing Medical is still following the inertia of the past two years: implant release, overseas acceleration, and deepening coverage of tertiary hospitals. This led to a 21.6% increase in the company's revenue during the reporting period to 163.4 million yuan, and adjusted net profit of 488.97 million yuan, an increase of 24.3% over the previous year. The gross margin for the period was 74.2%, the same as 74.1% in the same period in 2025, indicating that the impact on average collection prices has been absorbed by the product structure and price volume, and has not continued to be transmitted to the gross profit side.

However, the variable that really hangs over the fundamentals of Tianxing Medical is the uncertainty about the price of the continued procurement of sports medicine. The two-year sports medicine cycle of the first round of domestic procurement was calculated on a rolling basis. The average price of the first round of Tianxing's 14 core products has dropped by about 39% compared to pre-collection pressure; in April 2026, the joint procurement platform has begun maintenance of sports medicine continuity information. If it eventually switches to re-bidding, the subsequent price will be settled during the “reporting - document - bid opening” process, and then implemented in batches by province. The time window is likely to fall from the second half of 2026 to 2027.

If the subscription is renewed only on an annual basis, the original selection price will continue, and there will be no new price reduction; if the national procurement is re-imported, the price may be under pressure again. Currently, there is a high probability that prices will continue to decline moderately. Under such a scenario, Tianxing Medical implants can still maintain positive revenue growth with a volume growth rate of 25% or more. On this basis, the rapid growth in overseas revenue and the gradual release of equipment and consumables with high certainty will allow Tianxing Medical to maintain a moderate growth rate.

However, the fundamental certainty that “medium growth is supported and can be hedged against continued price cuts” is the most realistic logic underpinning the low stock price of Tianxing Medical. Furthermore, from a valuation perspective, if Tianxing Medical's adjusted net profit growth rate of 24% in the first half of 2026 is used as the whole year, the adjusted net profit in 2026 can reach about RMB 191 million. The current market value of HK$4.372 billion corresponds to 21 times PE in 2026, and has already entered a reasonable valuation range.

The lifting of the ban has never been a fundamental variable; it is just a concentrated release of short-term sentiment — when the lifting of the ban is calculated in advance by the market, and the downside gradually clears up as the ban is lifted, the right to price the stock price will actually be returned from “anxiety about waiting for the ban to be lifted” to “common sense of looking at performance,” and its stock price may change accordingly.