On May 29, the share price of leading home medical device company COFOE MEDICAL (01187.HK) experienced significant volatility, dropping to an intraday low of HK$28.52, marking a new record low since its listing. The stock closed at HK$28.7 per share, down 0.35% for the day. Earlier this month, the company successfully completed its listing on the Hong Kong Stock Exchange, achieving a dual "A+H" share capital structure, which was initially viewed by the market as a significant milestone for its expansion into global markets. However, the reality has been particularly harsh. The stock broke its issue price on its very first trading day and has continued to weaken since, now trading 27.03% below its IPO price of HK$39.33 per share, with its market capitalization shrinking to HK$6.77 billion.
In fact, COFOE MEDICAL's performance in the A-share market has been similarly disappointing, mired in a prolonged slump below its issue price. The company debuted on the ChiNext board of the A-share market on October 25, 2021, at a high price of 93.09 yuan per share. However, over the more than four years since its listing, its A-share price has continued to fluctuate downward. As of now, its price has fallen to 47.09 yuan, nearly halving from its IPO price.
Against this backdrop, COFOE MEDICAL proceeded with its Hong Kong listing, attempting to tell a new story of a "global consumer healthcare enterprise" through the dual "A+H" platform. However, investors appear unconvinced. This skepticism stems from the gradually exposed imbalance in the company's financial structure.
COFOE MEDICAL focuses on home medical devices, offering a comprehensive range of products primarily in rehabilitation aids, medical care, health monitoring, respiratory support, traditional Chinese medicine physiotherapy, and other categories. From a performance perspective, the company's results are noteworthy. According to its first-quarter 2026 financial report, revenue reached 1.012 billion yuan, representing a year-on-year increase of 37.22%. Net profit attributable to shareholders was 107 million yuan, up 17.08% year-on-year.
Interestingly, behind this seemingly robust performance growth, the company exhibits an extreme tendency towards "heavy marketing, light R&D," raising market doubts about its long-term growth potential. From 2022 to 2025, COFOE MEDICAL's R&D expenses were 118 million yuan, 114 million yuan, 96 million yuan, and 87 million yuan respectively, showing a continuous weakening of investment intensity. In stark contrast, the company's sales and marketing expenses surged from 619 million yuan to 1.158 billion yuan over the same period. The first quarter of 2026 highlighted this imbalance even more starkly: quarterly sales and marketing expenses reached a high of 353 million yuan, while R&D expenses were merely 22,089,600 yuan. Sales and marketing expenses were nearly 16 times the R&D expenditure.
As a leading player in the home medical device sector, this inverted investment structure appears incongruous within the medical device industry. Beyond weak R&D and insufficient innovation momentum, COFOE MEDICAL's aggressive merger and acquisition (M&A) expansion strategy has also planted significant financial risks for the company.
In a bid to rapidly expand its product categories, COFOE MEDICAL has embarked on a frenzied "buy, buy, buy" spree in recent years. It has successively acquired companies such as Beibeijia, Jirui Medical, Chengdu Yier, Shanghai Huazhou, and Hong Kong's Ximanla, quickly achieving a multi-category, multi-segment layout expansion. While this M&A model has undeniably helped the company rapidly grow its revenue scale and enrich its product matrix in a short time, it has also brought substantial goodwill risks. As of the end of March 2026, COFOE MEDICAL's goodwill balance had reached a significant 369 million yuan. Subsequently, if the performance of the acquired entities fails to meet expectations, goodwill impairment will directly drag down profits.
Earlier, through the acquisition of Beibeijia, COFOE MEDICAL successfully created a viral consumer product phenomenon. Leveraging e-commerce platform traffic operations and live-streaming marketing, it achieved explosive performance growth, allowing it to understand the logic behind creating marketing hits. While marketing can ignite short-term performance, only technology and products can sustain a company's long-term journey. Moving forward, whether COFOE MEDICAL can successfully narrate a new story about globalization and technological upgrading in the Hong Kong market may still require further testing by the market and time.