Event: the company recently announced its mid-term results in 2022, with an income of 210 million yuan (- 12.2%) in the first half and a loss of-200 million yuan (- 104.5%) attributable to the owner of the parent company.
The epidemic affects the amount of short-term surgery. In terms of business, TAVR income in the first half of 2022 was 200 million yuan (- 16.2%), accounting for 93.7%, which is the core business. The slowdown in income growth is mainly due to the repeated impact of domestic epidemics on terminal surgery. The income of VenusP-Valve is 9.11 million yuan, accounting for 4.3%. The income of TriGUARD3 is 3.8 million yuan, accounting for 1.3%. From the perspective of profitability, 22H1 gross profit margin is 78.2%, basically stable, sales expense rate is 58.8%. In the future, it will optimize sales efficiency and improve the output of medium and high-grade hospitals, pursue domestic commercial "profitability", management expense rate is 26.1%, R & D expense rate is 104.9%, the company increases R & D investment, and multi-center clinical practice is accelerated around the world.
TAVR business industry has a solid position and has many breakthroughs in internationalization. According to the forecast of Frost&Sullivan, the number of TAVR operations in China is expected to reach 42000 in 2025, the ex-factory scale of the industry is expected to reach 5 billion yuan, and the industry is rapidly expanding. With the listing of VenusA-Pro in May 2022, the company is the first company in China to have three TAVR products. From the perspective of channels, as of 2022H1, the company has a sales team of more than 260 people (an increase of about 40 compared with the end of 2021), more than 375 hospitals (an increase of about 15 compared with the end of 2021), 1800 cases of TAVR implantation in the first half of the year, and 60% of the second generation products. The terminal market share maintains an absolute leading position. In the first half of the year, the company's international strategy has also achieved more breakthroughs, among which VenusP-Valve was certified by European MDR in April and has entered 14 markets in Britain, Ireland, Germany and other countries by expanding its global direct sales and distribution network. In addition, TriGUARD3 sales in Europe have been steadily promoted. 22H1's overseas revenue is 14 million yuan, an increase of 150% over the same period last year.
The research pipeline is rich, from valvular disease to renal artery ablation to expand the business boundary. In recent years, the company has maintained high R & D investment, deep layout of TAVR, aortic valve repair, TPVR, TMVR/TTVR, surgical valve, renal artery ablation and so on. Among them, 1) the products under research and reserve of TAVR include Venus-PowerX (self-expanding dry valve, in FIM clinic) and Venus-Vitae (ball expanded dry valve, in FIM clinic); 2) the active valve repair product Leaflex is in the clinical trial stage of FIM,CE in China; 3) TPVR products have been listed in Europe and China, and plan to start clinical trials in the United States and Japan at the same time. 4) Cardiovalve's TMVR/TTVR products have been conducted in multicenter clinical trials in the United States and Europe, while accelerating clinical development and registration in the Chinese market; 5) among the supporting products, CEP device TriGUARD3 has been listed and sold in Europe, and the Chinese market is in the process of registration; 6) RDN products are currently in the animal research stage, employing Professor Martin B. Leon of RDN and his team as the global PI. 7) the domestic multicenter clinical trial of Liwen RF, an innovative instrument for the treatment of HCM, is under way, and clinical trials are planned in Europe; 8) the surgical dry valve Venus-Neo is currently in the FIM stage.
The company is rich in R & D pipelines, and its follow-up advantages are constantly consolidated.
Profit forecast: it is estimated that the income from 2022 to 2024 will be 5,8.2 and 1.08 billion yuan respectively, and the net profit will be-4 yuan,-2.5 yuan and-240 million yuan respectively.
Risk tips: product volume is less than expected, R & D failure risk, policy fee control risk, competition intensified.
