Recently, the Shanghai Stock Exchange officially announced that the IPO review status of Shanghai Huihe Medical Technology Co., Ltd. on the STAR Market has been changed to "terminated." The reason for termination is that the company and its sponsors Soochow Securities and Guotai Haitong Securities voluntarily withdrew their issuance and listing applications. The company became the first STAR Market biopharmaceutical company to terminate its IPO in 2026. From the acceptance of its prospectus on June 30 to the voluntary withdrawal on September 24, Huihe Medical's STAR Market journey lasted less than three months. Notably, on July 1, the Securities Association of China published the fourth batch of on-site inspection random抽查 list for IPO companies in 2026, and Huihe Medical was prominently included. What problems did the regulator's "on-site health check" uncover? Why would a star medical device company with the only domestically approved product in its category and a three-year revenue compound growth rate exceeding 500% choose to retreat at the doorstep of its IPO?

Continuous Contraction in R&D Investment, Channel and Capacity Expansion Draw Attention

With the deepening of registration-based reform, on-site inspections have gradually shifted from random sampling to problem-oriented approaches, focusing on the authenticity of information disclosure, financial standardization, and internal control effectiveness. For unprofitable medical device companies applying under the fifth set of standards, the regulatory scrutiny is even stricter, with the authenticity of R&D investment, the originality of core technologies, and the traceability of commercialization data being top priorities. Combining the prospectus disclosure and the high-frequency inspection areas of on-site checks, Huihe Medical's business and financial data contain multiple questionable points, which may be the core reason for its voluntary withdrawal after the on-site inspection commenced. First is the continuous contraction in R&D investment. From 2023 to 2025, Huihe Medical's R&D expenses were 134 million yuan, 108 million yuan, and 90.0459 million yuan, respectively, showing a year-by-year decline with a cumulative three-year drop of 32.8%. Meanwhile, the number of R&D personnel decreased from 87 to 58, a loss of over 30%, and the proportion of R&D personnel fell from 37.5% to 25.22%. More concerning than the R&D contraction is the authenticity of channels behind the explosive revenue growth. Huihe Medical's revenue from 2023 to 2025 was 2.8037 million yuan, 26.9882 million yuan, and 102 million yuan, respectively, with a three-year compound growth rate of 501.81%. Among them, the core product K-Clip was only approved for marketing in March 2025, yet it generated 43.0713 million yuan in revenue in its first year, accounting for 42.43%. However, behind this rapid growth is an extremely fragmented distributor structure. The prospectus shows that in 2025, the top five customers together accounted for only 11% of revenue, with the remaining 90% scattered among numerous small and medium-sized distributors, each with annual sales of less than 2 million yuan. For high-value medical devices, such an extremely fragmented channel structure is uncommon and poses difficulties for verifying revenue authenticity. On-site inspections typically select major distributors for end-user penetration checks to verify whether products truly flow into hospitals, whether there is distributor hoarding, and whether there are hidden related-party shareholdings. A fragmented channel structure undoubtedly amplifies the risks of such inspections. In addition, the company's low capacity utilization rate despite fundraising for expansion raises questions about its rationale. The prospectus shows that Huihe Medical's core product, the transcatheter tricuspid valve annuloplasty system, has a designed annual capacity of 5,000 units, but actual production in 2025 was only 1,435 units, with a capacity utilization rate of less than 30%; sales were only 657 units, with a production-to-sales ratio of less than 46%. The supporting delivery sheath kit had a production of 1,072 units and sales of 469 units, also with a production-to-sales ratio of less than 44%. With substantial existing capacity idle, Huihe Medical still plans to raise 430 million yuan to build a new production center, planning an annual output of 10,000 units each of the tricuspid valve annuloplasty system and delivery sheath kit, roughly double the current capacity. Raising funds to double capacity when utilization is below 30% easily invites regulatory questions about the necessity and feasibility of the fundraising. On-site inspections will also physically verify the actual operation of production workshops, capacity calculation basis, and order backlog to validate whether the expansion plan is supported by real market demand.

Equity Price Gap Exceeding 14 Times During Application Period, Large Unconditional Equity Incentives to Actual Controller

Beyond financial and business issues, Huihe Medical's equity structure and corporate governance also present risks that cannot be ignored. During the reporting period, Huihe Medical recognized share-based payment expenses for equity incentives of 70.6073 million yuan, 79.3090 million yuan, and 169.7864 million yuan, respectively, totaling over 320 million yuan over three years, which is one of the important reasons for the company's continued large losses. The most notable is the one-time grant of 1.52 million shares to actual controller Lin Lin in 2025. With no waiting period or performance conditions, the corresponding share-based payment expense recognized was as high as 152 million yuan, accounting for nearly 90% of the total share-based payments that year. Large, unconditional equity incentives to the actual controller are relatively rare among IPO companies. Typically, equity incentives are designed to bind core employees and motivate performance growth, with service periods and performance conditions being industry norms. Granting large, unconditional shares with no waiting period to the actual controller himself raises questions about whether there is any benefit transfer behind it. Furthermore, on the eve of the IPO, the company's equity transfer prices showed huge disparities, and the fairness of equity pricing may face challenges. The prospectus shows that in the four months from December 2025 to April 2026 before the application, the company simultaneously had three vastly different equity transaction prices. The lowest tier was 8.83 yuan per share, with the transferor being Shanghai Juheng, an employee stock ownership platform where the actual controller serves as the executive partner. During this period, more than ten small-portion transfers were completed, with recipients including over ten institutional shareholders such as Boyuan Venture Capital, Taiping Medical, Zhuhai Maide, and Jiaxing Nuoyu. The company disclosed that the pricing basis for this price was "according to the withdrawal agreement price of former core technical personnel Cheng Zengbing," who left in February 2025 for personal reasons. The middle tier was 58.33 yuan per share, from the transfer of shares by the shareholding platform Shanghai Jinheng to Zhuhai Maide. The highest tier was as high as 125 yuan per share, corresponding to the capital increase by two institutions, Taiping Medical and Suzhou Sherpa. Taiping Medical is a private equity fund under China Taiping Insurance, and Suzhou Sherpa's backers include Suzhou Biomedical Industrial Park, CITIC Securities, Tencent, and Sequoia Capital. This round of capital increase corresponded to an overall company valuation of approximately 4.5 billion yuan. Within the same application window, the per-share pricing differed by more than 14 times. Whether using a departing employee's withdrawal price as the pricing benchmark for bulk equity transfers is fair, whether low-price transfers involve benefit transfer, and whether the high-price entry at 14 times the price just months before the IPO application involves undisclosed valuation adjustment arrangements or other benefit agreements all remain to be verified. Based on the current situation, Huihe Medical's IPO failure is both influenced by the on-site inspection and an inevitable result of the long-term accumulation of the company's own risks. As a pioneer in the domestic tricuspid valve intervention field, the company's technological innovation capabilities have market value, but its shortcomings in financial quality, business compliance, and corporate governance ultimately became stumbling blocks on its IPO path.