The company is one of the leading enterprises in the field of cardiovascular interventional medical devices in China, insisting on R & D and innovation. there is a large amount of technology accumulation in memory metal materials, nano-surface coatings and absorbable iron-based alloy materials. At present, it has achieved a breakthrough in the field of treatment from small to large, the market from domestic to emerging countries to Europe and the United States, and products from low-end imitation to high-end innovation. At present, 7 products have been approved for innovative medical devices, leading the way in China.
Landmark blockbuster products have been approved one after another, and the blockbuster left atrial appendage occluder, which will bring rapid growth in the next 3-5 years, has been licensed in Europe and China in 2016 and 2017, respectively, and pacemakers have been approved for sale in China in December 2017. These two products will lead the company's rapid growth in the next 3-5 years. The left atrial appendage occluder is ahead of its competitors in efficacy, maneuverability and safety, and is expected to accelerate the development of the domestic market and replace foreign investment in the European market. With the rare independent R & D and innovation ability of domestic enterprises to attract Medtronic PLC strategic cooperation, pacemakers are expected to quickly achieve import substitution with the help of Medtronic PLC's brand and channels, expand the domestic pacemaker market and create the first domestic brand.
Fully innovative absorbable iron-based stents have the potential to lead absorbable material stents the company has developed absorbable iron-based stents from scratch, which can be degraded in the right time while maintaining the same mechanical properties as metal stents. It is a potential innovative product of absorbable stents in the future. At present, the domestic FIM test has been completed, and if the product solves the biosafety problem on the basis of degradation, it will help the global intervention device industry to achieve a major breakthrough in absorbable materials, with great potential in the future, and will bring broader profit space and valuation space for the company. The proportion of the company's R & D investment is far higher than the domestic average, and the R & D pipeline is advancing smoothly, which is expected to continue to contribute new products to the field of structural heart disease and peripheral blood vessels to maintain growth.
Risk tips: research and development expenditure exceeded expectations; research and development progress did not meet expectations; bidding price reduction exceeded expectations
Investment advice: ushering in the performance harvest period and valuation improvement period, the company is rated as "buy". It is estimated that the company's 2018-2020 income will be 681 million yuan, with a growth rate of 27.9%, 30.2% and 29.7%, respectively, and its mother's net profit will be 1.35 million, 2.06 million yuan, respectively, with a growth rate of-17.5%, 52.6% and 43.9%, respectively. The EPS is 0.031 20PE 0.048 20PE 0.068 yuan, and the current stock price is 29max 20x. As the sales of blockbuster products such as left atrial appendage occluders and pacemakers will bring 3-5 years of high performance growth, if innovative iron-based stents are approved in the future, it will bring larger market size and valuation space, giving PE26-28x in 2020 a reasonable valuation of HK $2.06-2.22 in the coming year, with a valuation space of 28% Rue 38% from the current price, and a "buy" investment rating.