2022H1 turned a loss into a profit, and revenue increased 25.09% year over year. 2022H1 has revenue of 175 million yuan (+25.09%), net profit of 103 million yuan (+348.05%), net profit of 0.3 million yuan (+2514.63%) after non-return to the mother, gross profit margin of 82.57% (-5.65pp), R&D expenditure of 77 million yuan (+26.23%), and the Group's cash and cash equivalents amounted to 1.06 billion yuan. Under repeated epidemics in the first half of 2022, the company turned a loss into a profit and increased revenue by more than 20%, showing strong profitability.

The three core products of 22H1 were approved, and commercialization of the intravenous and channel business began. The 2022H1 intravenous radiofrequency ablation system, DCB AVF maintenance indications, and peripheral support catheters were approved. The revenue structure is diversified. DCB's revenue share fell to 81.5% from 98.6% in the same period last year, and the share of intravenous intervention and vascular access products increased to 17.4% from 1.3% in the same period last year.

Through the pandemic, business expansion has continued unabated. 2022H1 SFA DCB achieved 1,400 hospital admissions, BTKDCB achieved 650 hospital admissions; suction catheters achieved 950 hospital admissions, all far exceeding the same period last year.

Risk warning: Risk of R&D progress falling short of expectations; risk of procurement price reduction exceeding expectations; risk of surgery falling short of expectations; risk of falling product prices and falling margins due to homogenized competition.

Investment advice: “Artery+vein” two-wheel drive to maintain the “buy” rating.

Considering the recurrence of the epidemic, the supply chain and elective surgeries were affected. The net profit forecast for 22-24 was slightly adjusted to $0.54/0.85/122 million (originally $0.58/103/149 million), with a year-on-year growth rate of 68.05%/57.19%/44.07%; diluted EPS = 0.17/0.27/0.39 yuan. The current stock price corresponds to PE=42/27/19x.