ConMed Medical Holdings Limited (Stock Code: 9997) has proposed privatization through a Scheme of Arrangement. Here's a summary of key information:

**Core Information:** **Privatization Method:** Through a Scheme of Arrangement (court-approved scheme) **Cancellation Price:** HK$9.25 per share in cash

**Key Meetings:** - Court Meeting: Monday, November 10, 2025, 10:00 AM - Extraordinary General Meeting: Monday, November 10, 2025, 10:30 AM (or immediately following the Court Meeting) - Venue: Unitek Conference Centre, 10th Floor, United Centre, 95 Queensway, Admiralty, Hong Kong

**Important Deadlines:** - Transfer document submission deadline (for meeting voting eligibility): Monday, November 3, 2025, 4:30 PM - Court Meeting proxy form submission deadline: Saturday, November 8, 2025, 10:00 AM - EGM proxy form submission deadline: Saturday, November 8, 2025, 10:30 AM

**Action Required:** Whether you can attend the meetings in person or not, you must complete and return the proxy forms accompanying the scheme documents (pink form for Court Meeting, white form for EGM).

**Scheme Effectiveness Prerequisites:** The scheme requires approval by the required majority at both the Court Meeting and EGM, plus approval from the Cayman Islands Court.

**Delisting:** If the scheme becomes effective, the company's shares will be delisted from the Stock Exchange.

**Connected Transactions:** This privatization involves connected transactions (rollover arrangements and shareholders' agreement) related to founder entities, requiring independent shareholders' approval.

**Shareholder Recommendations:** Read all information in the scheme documents carefully. If in doubt, consult your stockbroker, bank manager, lawyer, professional accountant, or other professional advisors.

The Independent Board Committee and Independent Financial Adviser (New Paisley Finance Limited) consider the proposal and connected transactions fair and reasonable for independent shareholders, recommending voting in favor.

**In Simple Terms:** Major shareholders propose to acquire all other shareholders' shares at HK$9.25 per share, privatizing the company and delisting it. Shareholders need to decide whether to agree to this proposal. Key attention should be paid to meeting dates and proxy form submission deadlines - even if you don't plan to attend in person, you need to express your voting intention through the forms.

**ConMed Medical Financial Performance and Industry Overview (2019-2025 First Half)**

**1. Financial Performance Overview**

**Revenue:** Growing but significantly slowing - **Overall Trend:** Revenue continued growing from RMB786 million in FY2022 to RMB1.009 billion in FY2024. However, growth rate significantly slowed: - FY2023 YoY growth: 17.8% - FY2024 YoY growth: 8.9% - 2025 first half YoY growth: 8.3% - **Conclusion:** Growth decelerated from double digits to single digits

**Product Structure:** - **Core Legacy Products** (disposable trocar, clip applier, electrocoagulation forceps): Still the mainstay (approximately 77.5% of revenue), but growth lackluster (2025 first half growth only 5.7%), market penetration seemingly peaked - **New Products** (ultrasonic scalpel, stapler, 4K endoscope): Contributing more (9.0% of revenue), but lacking growth momentum. Particularly 4K endoscopes saw significant sales decline in FY2024 and 2025 first half - **Reason:** New products face intense competition, strict hospital procurement standards, and high replacement costs, leading to promotion difficulties

**Market Regions:** - **Domestic Market:** Growth continuously slowing (2025 first half only 6.5% growth), main cause of overall deceleration - **Overseas Market:** Strong performance with 27.7% growth in 2025 first half. Company has entered over 90 countries, actively expanding global channels

**Profitability:** Both profit and margins under pressure - **Gross Margin:** Slight decline from 80.8% in FY2022 to 79.0% in 2025 first half, mainly due to increased proportion of lower-margin new products - **Net Profit:** - Profit attributable to shareholders: 7.0% YoY decline in 2025 first half - Adjusted net profit (non-HKFRS): Better reflects core business performance, but also declined 18.5% YoY in 2025 first half - **Net Profit Margin:** Clear declining trend. Adjusted net margin fell from 63.4% in FY2022 to 45.1% in 2025 first half

**Reasons for Profit Decline:** - Increased losses from investment in associate (Allgens Medical) - Reduced bank interest income and government subsidies - Increased sales and R&D expenses

**R&D Expenditure:** Rise then fall - FY2023 R&D expenditure increased significantly due to consolidation of associate Allgens Medical's R&D investment and increased own R&D projects - After March 2024, no longer consolidating Allgens Medical's statements, leading to significant R&D expenditure decline in FY2024 and 2025 first half

**Cash Flow and Assets** - **Cash Rich:** Company has abundant cash and equivalents (approximately RMB1.707 billion as of June 30, 2025), with solid financial position - **Net Asset Value (NAV) and NAV per Share:** Due to large dividend payments (especially 2023 special dividend), total NAV and NAV per share declined after 2023

**Dividend Policy** Company has no fixed dividend policy. Paid special dividend in 2023 (celebrating 20th anniversary), but no dividend in 2025 first half, with clear statement that no dividends will be paid before privatization completion.

**2. Industry Challenges and Risks**

**Growth Ceiling:** Core legacy products slowing, markets becoming saturated; new products facing promotion difficulties, leading company into single-digit revenue growth era.

**Policy Pressure (Volume-Based Procurement):** China's centralized volume-based procurement policy creates continuous downward price pressure on medical devices. While company mitigated through distributor elimination, long-term pricing pressure remains.

**Medical Insurance Cost Control:** National DRG/DIP payment reform aims to control total medical costs, limiting hospitals' surgical volume growth and reducing willingness to purchase high-priced medical devices.

**Intense Market Competition:** Especially in new technology products, company faces fierce competition from established manufacturers.

**Summary** ConMed Medical is a cash-rich company with stable core business profitability. However, it faces growth bottlenecks: legacy products lack growth momentum, new products struggle to break through. Meanwhile, under dual pressure from tightening domestic medical policies and intensifying market competition, its profitability (margins) is being eroded.

This financial analysis depicts a mature company seeking transformation while facing challenges, providing context for major shareholders' decision to propose privatization at this time.