Valuation Impact Analysis of Tongxin Medical's Change of Tutoring Institution (From CICC to CITIC Securities) Ahead of STAR Market IPO

Based on the collected information, I provide you with a detailed analysis of Tongxin Medical’s change of tutoring institution ahead of its STAR Market IPO:

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Tongxin Medical (Suzhou Tongxin Medical Technology Co., Ltd.) was founded in 2008 and is dedicated to the R&D, production, and sales of technologically breakthrough ventricular assist devices (VAD, “artificial heart”). The company officially submitted its STAR Market IPO application on

[1][2].

• May 2022
  : Signed a tutoring agreement with CICC, intending to appoint it as the tutoring institution for its initial public offering[1][2]
• July 2025
  : Terminated the Tutoring Agreement with CICC and replaced the tutoring institution with CITIC Securities[1][2]
• December 26, 2025
  : Submitted STAR Market IPO application (only about 5 months after the change of tutoring institution)[2]

According to official announcements, Tongxin Medical recognizes the work and efforts made by CICC during the cooperation period, but made the decision to replace the tutoring institution after comprehensively evaluating the adaptability of dimensions such as project execution experience and service response efficiency, in order to “better align with the actual needs of current business development and project progress”[1].

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Replacing the “escort” at the last minute is uncommon among pre-IPO companies, especially after a three-year tutoring relationship. This unusual change may send the following signals to the market:

Potential Signal	Impact Analysis
Strategic Differences	Changing the tutoring institution usually indicates major differences between the company and the original intermediary in strategic planning, schedule arrangement, or compliance understanding[2]
Path Adjustment	May reflect internal adjustments to the company’s listing path or valuation expectations[2]
Risk Reassessment	The original tutoring institution may have different views on certain risk factors, while the new institution may have different risk tolerance and valuation logic

• Rich IPO experience in the healthcare sector
• In-depth project accumulation in the innovative medical device field
• Long-term focus on high-end manufacturing and medical technology segments

• Dominant position in the STAR Market with abundant project reserves
• Broader institutional investor network
• May adopt more aggressive pricing and issuance strategies

From a valuation perspective, switching to CITIC Securities may imply:

• The company may seek a more aggressive valuation strategy
• Leverage CITIC Securities’ stronger institutional sales capabilities to support higher offering pricing
• Adapt to the current STAR Market environment and investor preferences

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According to the prospectus data, Tongxin Medical exhibits the characteristics of a typical innovative medical device enterprise:

[2]:

Financial Indicator	2022	2023	2024	H1 2025
Operating Revenue	RMB 8.61 million	Approximately RMB 40 million	RMB 77.35 million	RMB 72.07 million
Net Loss	-RMB 189 million	Approximately -RMB 280 million	-RMB 372 million	-RMB 193 million
Cumulative Loss	Nearly RMB 1 billion (total over three years)	-	-	-
Asset-Liability Ratio	-	-	93.48%[2]	-
Net Assets	-	-	-	RMB 322 million[2]
Undistributed Profits	-	-	-	-RMB 1.273 billion[2]

• Net cash flow from operating activities remains negative (reached -RMB 293 million in 2024)[2]
• Highly dependent on external financing to maintain operations and R&D investment[2]

• The company’s product CH-VAD is one of only two fully magnetically levitated artificial hearts worldwide[2]
• Over 670 clinical implantations have been completed in more than 80 hospitals across the country[2]
• Rapid growth in product sales revenue: approximately RMB 40 million in 2023, reaching RMB 67.0598 million in 2024 (grew by approximately 8 times within two years)[2]

• Single Product Dependence
  : The company stated that “if the clinical development progress of other products under R&D is unsatisfactory, its continuous operation capability will be restricted by the single product”[2]
• High Customer Concentration
  : In 2023, the sales revenue from the largest customer accounted for as high as 68.3%, and the top five customers accounted for over 70%[2]
• Product Price Reduction Pressure
  : May affect future profitability
• Technology Iteration Risk
  : The medical device industry features rapid technological updates

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Impact Factor	Impact Direction	Weight	Explanation
Change of Tutoring Institution	Slightly Negative	Medium	May trigger market concerns about the company’s compliance and stability
Sustained Financial Losses	Negative	High	Nearly RMB 1 billion in losses over three years, with undistributed profits of -RMB 1.273 billion
Product Commercialization Progress	Positive	High	Rapid revenue growth and increasing market penetration
Industry Scarcity	Positive	Medium	One of the only fully magnetically levitated artificial heart technologies worldwide
Corporate Governance Structure	Neutral to Slightly Negative	Medium	Family-controlled structure raises concerns about minority shareholder interest protection
Senior Management Background	Neutral	Low	Combination of a CEO with financial background and a technical founder

Combined with market analysis, Tongxin Medical’s change of tutoring institution may bring the following changes to valuation expectations:

1. The unusual move of changing the tutoring institution may prompt investors to re-examine the company’s compliance risks[2]
2. The exit of CICC as the original tutoring institution may trigger market concerns about issues discovered during its due diligence
3. Against the background of stricter STAR Market review, changing the tutoring institution may be interpreted as “avoiding problems” rather than “optimizing resource allocation”

1. CITIC Securities’ stronger sales network and institutional investor relationships may support more aggressive pricing
2. The company may have received recognition from new strategic investors (completed over USD 100 million in strategic financing in July 2025)[1]
3. The core technological barriers and growth potential of market demand remain attractive

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Based on the above analysis, Tongxin Medical’s IPO faces the following core risks:

1. Going Concern Risk
   : As of June 2025, the company’s net assets are only RMB 322 million, with undistributed profits of -RMB 1.273 billion, and losses continue to expand[2]
2. Single Product Risk
   : The company’s operating performance is highly dependent on the CH-VAD product[2]
3. Customer Concentration Risk
   : The largest customer accounts for 68.3% of revenue, representing significant dependence[2]
4. Regulatory Compliance Risk
   : The product is approved for “conditional listing” and faces continuous regulatory requirements[2]
5. Corporate Governance Risk
   : The family-controlled structure may affect the protection of minority shareholders’ rights and interests[2]

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Tongxin Medical’s move to change its tutoring institution (from CICC to CITIC Securities) ahead of its STAR Market IPO is a signal worthy of attention. From a valuation perspective, this change may have a

:

• Short-term
  : May trigger market concerns about the company’s stability and compliance, creating pressure on valuation
• Medium to long-term
  : If the change is made to obtain more aggressive issuance strategies and stronger sales support, it may instead help the company achieve better valuation in the current market environment

Considering the company’s sustained financial losses, product dependence risks, and the unusual move of changing the tutoring institution, the market may adopt a

towards its IPO valuation. It is recommended that investors closely monitor subsequent inquiry responses, pricing ranges, and changes in the overall STAR Market environment.

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[1] Rui Caijing - “Tongxin Medical Restarts IPO Tutoring: Registered Capital Increases by 23%, Tutoring Institution Replaced with CITIC Securities” (https://m.rccaijing.com/news-7355497382534641059.html)

[2] Sina Finance - “Replacing the Leader at the Last Minute? Tongxin Medical Enters STAR Market with ‘Artificial Heart’, Losing Nearly RMB 1 Billion in Three Years” (https://finance.sina.com.cn/stock/newstock/2026-01-08/doc-inhfreqm6551320.shtml)