Xianjian Technology, founded in 1999, is a leading minimally invasive innovation enterprise in China. The company focuses on the R & D, production and sales of cardio-cerebrovascular minimally invasive medical devices. The company's products have excellent clinical evaluation, and the company has established a stable sales network around the world, and has distributors in more than 100 countries in Asia, Africa, North America, South America and Europe.
Summary of the report
Company overview
The core product line supports the company's business growth. Including structural heart disease business, peripheral vascular disease business and pacing electrophysiology business. Structural heart disease business mainly includes congenital heart disease occluder and left atrial appendage occluder; peripheral vascular disease business mainly includes vena cava filter and covered stent; pacing electrophysiological business mainly includes implantable cardiac pacemaker and cardiac pacing electrode lead.
The company's performance has maintained steady growth. On the revenue side, 2022H1's revenue is about 555.2 million yuan, an increase of about 20.4 percent over H1's 461.1 million yuan in 2021. The growth was mainly due to the rapid growth in sales of cardiac pacemakers, covered stents and Cera occluders. In terms of net profit, excluding non-recurrent items, the net profit attributable to the owners of 2022H1 is about 247.9 million yuan, while that of 2021H1 is about 184.4 million yuan, an increase of about 34.4%.
Industry status and prospects
The market for structural heart disease is growing rapidly. Global sales revenue increased from $4.8 billion in 2017 to $9.3 billion in 2021, with a compound annual growth rate of 18.0 per cent and is expected to reach $19.8 billion in 2025 and a compound annual growth rate of 20.8 per cent from 2021 to 2025.
The scale of peripheral vascular interventional devices maintained rapid growth. The domestic scale increased from 1.7 billion yuan in 2013 to 3.01 billion yuan in 2017, with a compound growth rate of 15.4%. It is estimated that the market size of peripheral vascular interventional medical devices in China will increase to 7.12 billion yuan by 2022. At present, the market in this field in China is mainly occupied by foreign enterprises. with the continuous enhancement of the R & D capability of Chinese production enterprises, it is expected that the market share of domestic medical devices will continue to increase.
Core competitive power
High-level R & D capability provides strong support for product listing.
The product layout is comprehensive and the research and development is progressing smoothly.
Internationalization further broadens the boundary of growth
Investment suggestion: Xianjian Technology is a leading minimally invasive innovative enterprise in China, with comprehensive product layout and outstanding R & D capabilities, and further broadens the growth boundary in terms of internationalization. In the future, it will continue to benefit from the growth of the industry and the trend of domestic substitution, with good growth. In terms of valuation, combining the valuations of comparable companies PE and DCF, we give Shanjian a market capitalization target of HK $15.7 billion and a buy rating corresponding to the target price of HK $3.39 per share.
Risk hint: the competition pattern is intensified and the product research and development is not as expected.