Gelonghui, Feb. 22 丨 CICC published a report that gave Elken Healthcare (1789.HK) an “outperform the industry” rating for the first time, with a target price of HK$10.88, which is equivalent to the price-earnings ratio predicted for next year by 29.9 times. According to the report, the company is a leading manufacturer of artificial joints in the mainland. It has a relatively complete product portfolio. Its business has expanded rapidly in recent years. Between 2017 and 2020, revenue rose from 373 million yuan (same below) to 1.04 billion yuan, meaning an average annual compound increase of 40.6%. With the promotion of centralized procurement, the previous year's revenue declined, but revenue increased 19% after the first round of centralized procurement in the first half of last year, and the bank is expected to enter a new growth stage. According to the report, there is huge room for improvement in the mainland joint implantation solutions market. In 2021, there were more than 900,000 orthopedic and joint surgeries in the mainland and maintained an annual growth rate of 15%; in 2020, the localization ratio of the joint sector was 47%. The bank anticipates that China's centralized procurement will speed up the localization process and help leading companies expand their market share. After centralized procurement, the price of artificial joint terminals fell 82% in 2021; Chinese companies performed well in bidding, and it is expected that the approved procurement volume in the next two years will guarantee the market share of leading companies. Furthermore, Elken Healthcare's 3D printing and product coverage help ensure long-term competitiveness. The stock is currently reported at HK$9.6, with a total market value of HK$10.7 billion.