Items:
On August 13, 2021, the company announced that it plans to acquire Nuocheng Medical, an innovative hypertrophic cardiomyopathy device company owned by Denuo Medical, to obtain its LiwenRF radiofrequency ablation system for the treatment of hypertrophic cardiomyopathy (HCM), and to further improve the layout of structural heart disease business.
Comments:
Nuocheng Medical's LiwenRF radiofrequency ablation system provides a new treatment for HCM patients. HCM (hypertrophic cardiomyopathy) is a common hereditary cardiovascular disease with a prevalence rate of about 0.2%. Conventional treatment of HCM usually includes drug diagnosis and treatment, surgery and alcohol chemical ablation, but they all have their limitations and risks. Nuocheng Medical's LiwenRF radiofrequency ablation system adopts the original Liwen procedure, which can not only make hypertrophic cardiomyocytes dehydrated and necrotic, but also block the blood supply of hypertrophic myocardial tissue, and achieve long-term prognosis. The results of exploratory trials of LiwenRF radiofrequency ablation system and comparison with traditional surgical gold standard surgery showed that the success rate of LiwenRF radiofrequency ablation system was as high as 88% and died 1 year after operation. the clinical manifestation, cardiac function and quality of life of the patients were significantly improved and were significantly better than those of surgery and alcohol ablation. At present, the product has entered a multicenter clinical study in China, and plans to give priority to applying and conducting clinical trials in the United States.
The acquisition of Nuocheng Medical will further enrich the layout of the company's structural heart disease business. The acquisition of Nuocheng Medical is another important progress in the company's transformation to a platform for the treatment of structural heart disease after the cooperative development of renal sympathetic nerve ablation. The Liwen procedure creates a catheter pathway through the myocardium and provides an innovative solution to the problem of perivalvular leakage in TAVR, TMVR and TTVR. The company will develop perivalvular leakage management technology based on the Liwen procedure to improve the overall valvular product line.
Profit forecast, valuation and investment rating. We expect the company's 21-23 revenue to be 543 million, 1.043 billion and 1.615 billion yuan, an increase of 97%, 92% and 55% over the same period last year, and net profit of-6 million yuan, 105 million yuan and 358 million yuan. According to DCF estimates, the reasonable market capitalization of the company should be 38.7 billion yuan (corresponding to the share price of HK $105), maintaining the "recommended" rating.
Risk tips: 1, the acquisition promotion is not as expected; 2, the integration effect is not as expected.