2022 results are slightly below our expectations
The company announced its 2022 results: revenue of 183 million yuan, +103.2% year-on-year; gross margin of 67.9%; net loss of 200 million yuan. It was slightly lower than our expectations, mainly due to R&D expenses and other expenses exceeding our expectations during the period.
Development trends
Commercialization is progressing and research pipelines are progressing smoothly. In 2022, the company achieved revenue of 183 million yuan, +103.2% year on year, of which revenue from thrombolization and stenosis contributed 142 million yuan, +57.7% year on year. The newly launched bleeding, access and prevention products, including blocking hemostasis systems, embolic spring rings, and left ventricular occlusion contributed more than 40 million yuan in revenue. The increase in gross margin was mainly due to lower costs of thrombolization devices and intracranial artery stenosis treatment products. As of the publication date of the annual report, the company had 17 new products approved by the NMPA, covering all types of neurological intervention procedures. In the research pipeline, 3 products completed clinical trial entry/summary, and 1 product initiated clinical trial enrollment.
The commercialization system is mature, and the supply chain is efficient and reliable. The company's product terminals have been implanted in more than 1,000 hospitals, covering most stroke centers. At the same time, the company has carefully built academic exchange platforms such as “Weilai Academy” and “Economic Theory” to establish a good brand image and influence. In terms of collection, the company won the bid for spring ring collection in Fujian and spring ring collection in the Jilin 21 Provincial League. On the supply side, the company has nearly 10,000 square meters of production and testing site, and has continuous production capacity building, stable channels and sufficient raw material reserves.
Invest in R&D to create complete cardiac intervention solutions and innovative R&D platforms. In 2022, the company invested 154 million yuan in R&D, +101.4% over the same period last year, of which 112 million yuan was spent on neurological interventional research and development, and 42 million yuan in the emerging sector. Currently, the company's R&D platform in the field of cardiac intervention includes passive consumables and active instruments. It has been deployed: treatment of atrial fibrillation and prevention of stroke, second and tricuspid valve reflux/stenosis, heart failure, cardiovascular interventional robots, pulmonary intervention products, etc.
Profit forecasting and valuation
Due to the impact of collection on product prices, we lowered our 2023 net profit forecast to -54 million yuan, and introduced the 2024 net profit forecast of 101 million yuan and lowered the target price of 7.4% to HK$46.3 million (corresponding to 29.7 times the 2026 forward price-earnings ratio), corresponding to an upward margin of 24.8%, maintaining outperforming the industry rating.
risks
Product development failed; clinical trials failed; product registration delayed or uncompleted; market competition; sales fell short of expectations; product price reduction; product quality; changes in government regulation or guidelines; intellectual property litigation; financing difficulties; cancellation of government subsidies; dilution of equity; loss of personnel.