{"text":[[{"start":5.673,"text":"This article only represents the author's own views."}],[{"start":9.082,"text":"The founder of medical technology company MicroPort Scientific Corporation (0853.HK) has stepped down from the board in the latest twist in a governance saga that has halted trade in its shares. In an announcement filed with the Hong Kong Stock Exchange on Oct. 25, the company said Zhaohua Chang had relinquished his board-level roles as a director and chairman, citing personal commitments, six months after stepping down as CEO."}],[{"start":36.32,"text":"He will remain as chief scientific officer, while Jonathan Chen was appointed executive director and CEO in leadership changes that took effect on Oct. 22. In the same statement, MicroPort announced a review of its governance systems in the wake of a controversy over hefty property leasing payments tied to an entity with reported links to founder Chang’s family. The company said Chang was exiting his roles without any disagreement with the board and that no other matters relating to his resignation needed to be brought to shareholders’ attention."}],[{"start":66.954,"text":"Chang played a key role in China’s efforts to develop a domestic industry in high-end medical devices. He founded MicroPort in Shanghai’s high-tech Zhangjiang area in 1998, starting with coronary stents and gradually building a medical device group spanning orthopedics, neurovascular surgery, cardiac rhythm management and surgical robotics. The firm made its Hong Kong stock debut in 2010 and later developed five listed companies, creating a MicroPort network across mainland and Hong Kong equity markets."}],[{"start":97.968,"text":"Chang, now 63, led MicroPort for nearly 28 years with long stints as both chairman and CEO. He stepped down as CEO in April this year, when Chen took over the role in a rotating structure. The founder’s son, Brian Chang, who had only become chairman of group company MicroPort CardioFlow Medtech (2160.HK) in August, also resigned as a director and gave up his board positions at the end of October."}],[{"start":123.28,"text":"Trading in MicroPort and three Hong Kong-listed group companies - MicroPort MedBot (2252.HK), MicroPort NeuroScientific (2172.HK) and MicroPort CardioFlow - has been suspended since Sept. 1 after they failed to publish their 2026 half-year results on time. The delays primarily involved unresolved questions about property leasing arrangements and the nature of the relationship with the landlord."}],[{"start":148.896,"text":"A statement issued in August said group companies signed 10 lease agreements with Shanghai BlueOrange Capital Corp. in 2021 for approximately 126,400 square meters of Shanghai premises. Total rent over the five-year term was approximately $195 million, equivalent to nearly 1.26 billion yuan, with outstanding security deposits of approximately 296 million yuan."}],[{"start":174.105,"text":"At the heart of the controversy is the relationship between the lessor and Chang’s family. An investigation by Yicai found that Brian Chang indirectly held interests in a company affiliated with the landlord through limited partnerships, with his direct and indirect stakes totaling more than 40%. National Business Daily found that MicroPort had identified BlueOrange Capital’s predecessor as a related-party lessor as early as 2017. Average rent under the leases was found to be above the going rate, at around 5.5 yuan per square meter per day compared with quoted prices of 3 yuan to 5 yuan for some nearby office buildings. The security deposits amounted to more than a year’s average rent, far exceeding the two to three months commonly required for commercial leases."}],[{"start":223.04,"text":"Minority shareholders questioned the fairness of the transactions and whether improper value transfers had taken place. In September, about 20 of them wrote to MicroPort’s board requesting an independent investigation into the commercial rationale for the leases, the landlord’s control structure and potential conflicts of interest. They also called for Chang and other relevant individuals to recuse themselves from the investigation and related decisions. Alongside its latest executive changes, MicroPort also outlined a review of the company’s corporate governance structure. The initiative aims to clarify the respective authority of the board and management and includes the dissolution of any management bodies established without formal board approval."}],[{"start":223.54,"text":"Struggling to deliver profits"}],[{"start":266.96,"text":"Aside from the controversy, MicroPort’s more immediate challenge is turning its expanding operations into sustainable profits. Rapid growth in coronary stents, as well as overseas acquisitions and business spinoffs helped lift group revenue from $779 million in 2021 to nearly $1.11 billion in 2025. Its bottom line, however, has been less encouraging."}],[{"start":289.044,"text":"MicroPort logged a net loss of $351 million in 2021, widening to $588 million in 2022 and $649 million in 2023. The loss narrowed to $268 million in 2024, but the company remained in the red. Those persistent losses reflect the ongoing investment required across orthopedics and surgical robotics for R&D, product registration and marketing, while some emerging businesses have yet to generate enough revenue to cover spending."}],[{"start":320.16,"text":"MicroPort ended its run of net losses in 2025 but only eked out a $38.43 million profit with help from approximately $327 million in gains from disposals, including about $277 million arising from the dilution of its stake in MicroPort NeuroScientific and the resulting loss of control. On an adjusted basis excluding asset disposals and other items, the group still recorded a full-year net loss of approximately $100 million."}],[{"start":351.36,"text":"Investors have sharply marked down MicroPort’s valuation. On Aug. 31, its last trading day before the suspension, the shares closed at HK$6.075 for a market capitalization of around HK$11.65 billion ($1.48 billion), 90% below its 2021 peak above HK$100 billion. Based on 2025 net profit, its historical price-to-earnings ratio was around 30, slightly above the 28 for fellow medical device leader Shenzhen Mindray Bio-Medical Electronics Co. Ltd. (300760.SZ). After the founder’s board exit, governance changes may follow. For the valuation to recover, the leasing controversy will need to be resolved and share trading resume. But more importantly, investors will be looking to see whether MicroPort’s businesses can deliver sustainable profits."}],[{"start":408.48,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793870681_2655.mp3"}