Group 1 - The company announced the acquisition of 2 million shares of Jiangsu Shentong, representing approximately 0.39% of the total issued shares, for a total consideration of approximately RMB 30.91 million (around HKD 34.20 million) at an average price of RMB 15.46 per share [1] - Following the acquisition, the company will hold a total of 9,003,500 shares of Jiangsu Shentong, which accounts for approximately 1.77% of the total issued shares [1] - Jiangsu Shentong is a key supplier of valves and maintenance services for the company, having developed a 5G IoT-based valve management system to optimize maintenance plans and reduce inventory levels [2] Group 2 - The acquisition is characterized as a vertical acquisition of minority equity, aimed at strengthening the existing business relationship between the company and Jiangsu Shentong, and is expected to facilitate deeper cooperation and future strategic initiatives [2] - Jiangsu Shentong has shown robust growth over the past three years, with revenue and net profit attributable to shareholders increasing by approximately 9.6% and 29.6%, respectively, in 2024 compared to 2022 [2] - The investment in Jiangsu Shentong may yield financial benefits, including potential capital appreciation and dividends, with a notable increase in dividend payouts from RMB 0.5 per 10 shares in 2022 to RMB 1.75 per 10 shares in 2024 [3]

Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $13.5 million for Q3 2025, a 29% increase compared to $10.5 million in the same period last year [5][15] - Gross profit for the quarter was $10.2 million, up from $7.7 million in the prior year, maintaining a gross margin of 75% [16] - Operating profit increased to approximately $1.3 million from $0.3 million year-over-year [16] - Adjusted EBITDA rose to $2 million from $1.1 million in the prior year [16] - The company ended the quarter with $70.7 million in cash and cash equivalents, an increase of $1.1 million from the end of 2024 [17] - Remaining performance obligations grew to $65 million, a 37% year-over-year increase [17] Business Line Data and Key Metrics Changes - The company shipped 90 Deep TMS systems during the quarter, representing a 43% increase compared to the same period last year, bringing the total install base to over 1,600 systems globally [5][15] - Approximately 70% of recent customer engagements were structured as multi-year lease agreements, indicating a strong transition to this sales model [8] Market Data and Key Metrics Changes - The company is focusing on expanding its market presence, particularly in Asia-Pacific and Europe, with strong demand anticipated from countries like Japan, China, South Korea, and India [36][38] - The company has received FDA clearance for an accelerated treatment protocol for major depressive disorder, which is expected to enhance patient appeal and drive demand [10] Company Strategy and Development Direction - The company’s strategy includes elevating market awareness of Deep TMS, advancing its R&D roadmap, and broadening patient access through global extension and health system integration [9] - The company is pursuing minority equity investments in mental health providers to enhance market awareness and expand access to Deep TMS [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s growth trajectory, citing strong market demand and a solid book-to-bill ratio of 1.3x for the quarter [8] - The company raised its revenue guidance for the full year 2025 to a range of $51 million-$52 million, reflecting a year-over-year growth rate of 24%-27% [18] Other Important Information - The company announced a virtual investor and analyst day on December 1 to discuss operational, clinical, regulatory, and financial progress in more detail [14] Q&A Session Summary Question: Can you discuss the accelerated protocol and its current treatments? - Management highlighted that the accelerated protocol shortens the acute phase from four weeks to six days, increasing treatment frequency, which is driving demand for growth [20] Question: What can be expected regarding minority equity investments? - Management indicated a robust pipeline for minority investments, aiming to sign at least one more agreement by year-end, with promising opportunities for 2026 [21] Question: Any updates on Neurolief's activities in Japan and the EU? - Management anticipates FDA clearance for Neurolief by year-end, which will enable marketing and distribution through various channels [22] Question: What are the expectations for system placements from minority partners? - Management noted that minority investments are expected to lead to the opening of 10-15 new clinics annually, with early investments showing over 50% utilization growth [28][29] Question: Will there be changes in metrics reporting going forward? - Management plans to provide more granularity on metrics such as system shipments and performance of minority investments during the analyst day [35] Question: What is the outlook for international growth? - Management expects strong growth from Asia-Pacific and Europe, with increasing demand in countries like Japan, China, and Germany [36][38]