Forecast revenue growth of 76-90% year-on-year
Peijia Medical released unaudited operating data, with revenue of about 2.4-260 million yuan in 2022, an increase of 75.8% 90.4% over the same period last year. Considering the disturbance of the epidemic throughout the year, the performance is basically in line with our expectations.
Pay attention to the main points
The valve + nerve twin engine is growing strongly. According to the company announcement, with the rapid expansion of transcatheter aortic valve placement (TAVR) products, we estimate that the number of TAVR implants in the company will be about 1200 in 2022, an increase of about 300% over the same period of 21 years. Considering the low base and the optimization of epidemic prevention and control in 2022, we expect the number of operations in the TAVR industry to enter a high growth phase in 2023. The company expects the share of TAVR implantation to reach more than 20% in 2023, and will continue to increase its share in head hospitals. In terms of nerve intervention, the company said that intermediate guidance catheters, balloon dilatation catheters, and intracranial electrolytic detachable coils continue to be released, while thrombectomy stents and aspiration catheters for acute ischemic lines have also been approved in 1H22 one after another, and we estimate that the revenue of nerve intervention business will increase by about 50% in 2022.
The development of the pipeline is progressing smoothly. Since the second half of 2022, the company has made a number of important R & D progress. The third-generation TAVR trunk valve Taurus NXT confirmatory clinical trial was successfully enrolled, and we expect to complete all patients in 2023; the cooperatively introduced transfemoral / atrial septal mitral valve replacement HighLife launched a multicenter registered clinical trial in China in November 2022; the co-purchased MonarQ tricuspid valve replacement conducted its first human trial (FIM) in Europe in November 2022. GeminiOne, a self-developed mitral marginal repair device, launched a multicenter registered clinical trial in China in December 2022. We also expect that TaurusTrio, a reflux TAVR product introduced by the company, will start clinical trials in China in 2023. We are optimistic about the company's rich layout of heart valve pipelines and look forward to the reading of key clinical data.
The medical device policy has warmed up and the volume of surgery is expected to recover. Since 2H22, the policy of collecting high-value consumables is becoming more and more mild. The company's intracranial spring coil has won the bid in the 21 provincial alliances of Jiangsu, Fujian and Jilin respectively, among which 21 provinces in Jilin have won the bid, and Pei Jiaqi won the third place in Group A, which is expected to accelerate the increase of the market share of the spring coil. We expect that the future neural intervention in the provincial alliance will lead to increased performance of the company. Although the epidemic has had an impact on the recent volume of routine surgery, we are optimistic about the accelerated recovery after stabilization. With the recovery of flying knife and teaching, we think that innovative procedures, including TAVR and neural intervention, will return to the rapid growth curve.
Profit forecast and valuation
We keep our profit forecast for 2022-24 unchanged. We maintain our outperform industry rating and target price of HK $13 based on the DCF model (WACC 10.1%, sustainable growth rate 1.4%), which is 19% upside from the current share price.
Risk.
The impact of the policy on prices exceeded expectations, the epidemic repeatedly affected the operation, and the research and development of new products failed.