Citi Resumes Coverage of MICROPORT with a Buy Rating and Target Price of HKD 16

The analyst rating for MICROPORT (00853.HK) is set at "Equalweight" due to several key factors highlighted in the Morgan Stanley report. The restructuring of its Cardiac Rhythm Management (CRM) business, including the acquisition of CRM by its subsidiary CARDIOFLOW-B, is seen as a significant cleanup event. This transaction is expected to address CRM's capital redemption obligations and reduce MICROPORT's financial expenses by refinancing senior convertible bonds at a lower interest rate of 2.8%. Additionally, the restructuring supports MICROPORT's goal to decrease its debt ratio from 70% to around 50% within 1-3 years, and further to 30-35% within 3-5 years. These developments contribute to the overall assessment of the company's financial health and future prospects, justifying the "Equalweight" rating.