The reported performance in 2021 is slightly lower than market expectations.
The company announced its mid-report results in 2021: revenue of 86.193 million yuan, an increase of 122% over the same period last year; a net loss of 70.065 million yuan, narrowed by 42% over the same period last year; due to slightly lower product implantation, 1H21 performance was slightly lower than market expectations.
Trend of development
The planting volume and sales volume of first-generation products in the first half of the year are slightly lower than market expectations, and we look forward to accelerating the volume in the second half of the year.
In the first half of 2021, due to the delayed admission time of some major hospitals and increased market competition, we expect the implant volume and sales volume of the company's first-generation TAVR (transcatheter aortic valve replacement) products to be slightly lower than market expectations, estimated to be about 1000 units. By the end of June, the company has gained a market leading position in about 100 of the more than 220 hospitals that can carry out TAVR surgery, and has taken the lead in entering the medical insurance catalogue in Yunnan and Guizhou provinces. The company currently has its own sales force of about 70-80 people. With the continuous expansion of the company's own sales force, the gradual maturity of the dealer network, the listing of second-generation products, and the exploration of other innovative sales models, we believe that the planting capacity of the company in the second half of the year is expected to be better than that in the first half of the year.
The second-generation TAVR will be approved soon, and the R & D pipeline will be carried out smoothly. The company's second-generation TAVR product, VitaFlow LibertyiM, submitted its registration application to the State Drug Administration in September 2010. the company is expected to be approved in the near future and submit its CE application by the end of the year. The Alwide "Plus second-generation balloon dilatation catheter was approved by NMPA separately. In addition, the company cooperated with Valcare to develop transcatheter mitral valve repair product Amend has entered the feasibility clinical trial stage overseas; the company's imported mitral valve replacement (4C Alta Valve) and self-developed mitral valve replacement products are expected to carry out human clinical trials in the second half of the year; the third-generation TAVR, self-developed mitral valve repair products, surgical valve and brain protective devices are also in progress in an orderly manner, and the company expects to finalize the design in the near future. We believe that the company is expected to build a rich product portfolio in the field of structural heart disease and accelerate the increase of market share.
Firmly value the field of transcatheter heart valve intervention. The population of patients with structural heart disease in China is large, and there is a large number of unmet clinical needs. Under the support of technological innovation and the favor of the capital market, the Heart Valve Race (TVD) represented by TAVR is in the ascendant. We expect the volume of surgery and the market scale to grow steadily at a high growth rate. We expect domestic enterprises to continue to produce innovative products and enter the field of transcatheter mitral / tricuspid intervention.
Profit forecast and valuation
As the amount of 1H21 implanted is slightly lower than expected and the market competition intensifies, we respectively cut our revenue forecast for 2021-22 by 896% to 2.45 / 498 million yuan, the forecast net loss of 2021 from 91 million yuan to 115 million yuan, and the net profit of 2022 by 9% to 55 million yuan. We cut the company's target price by 13.396 to HK $13 (based on DCF valuation), which is 69.1% upside from the current share price.
Risk.
The progress of research and development is not as expected, the market competition pattern deteriorates, and the policy suppresses the price more than expected.