Core viewpoints

The company occupies a leading position in the field of cardiac valve intervention in China, TAVR products since the commercialization of Q4 in 21 years, good clinical feedback, rapid expansion of interventional valve products; in addition, the company has a comprehensive and in-depth product R & D layout in the field of aortic valve, mitral valve and tricuspid valve treatment, which is expected to continue to consolidate the company's leading position in the field of heart valve. The company's neural intervention business is in the forefront of domestic companies. With the continuous enrichment of the product pipeline under development and the continuous promotion of the commercialization of certified products, the company's neural intervention business is expected to maintain rapid development.

Event

The company issues a 2022 performance forecast.

On January 18, the company issued a performance forecast for 2022, which is expected to achieve an annual operating income of RMB2.4-260 million, an increase of about 75.8% and 90.4% over the same period last year, which is basically in line with expectations.

Brief comment

Under the influence of the epidemic, revenue still maintained rapid growth, basically in line with expectations. According to the company's performance forecast, the company's operating income in 2022 was 2.4-260 million yuan, an increase of about 75.8 percent over the same period last year. Among them, the company realized operating income of about 1.21-141 million yuan in the second half of the year, an increase of 42.4 percent over the same period last year and an increase of 1.7 percent over the previous year.

Under the impact of the epidemic, the company's revenue side still maintained rapid growth, in line with market expectations. We expect the company's heart valve business to achieve revenue of about 110 million yuan in 22 years, an increase of about 162% over the same period last year, with more than 1200 terminal implants. 2022 is the second year of the company's intervention in the commercialization of valve products. Even with the impact of the epidemic, the company's valve products have been covered by about 250 hospitals, and the volume of commercial products has been accelerated. We estimate that the company's neural intervention business will achieve an income of about 140 million yuan in 22 years. Under the dual influence of the epidemic and spring coil collection, the company's neural intervention department has still achieved about 47% growth, mainly due to the continuous expansion of the company's existing neural intervention products and continued contribution to revenue growth.

Looking forward to 23 years, under the background of the adjustment of epidemic prevention policy, optional operations such as TAVR and interventional treatment of hemorrhagic stroke are expected to recover rapidly. we expect that the company's heart valve business sector is still expected to maintain rapid growth, and the nerve intervention business sector is still expected to maintain a growth rate of about 50%.

The research and development of innovative products for cardiac valve intervention has progressed steadily, and several pipelines are in the leading position in the field of aortic valve intervention in China: the company's third generation product, TaurusNXT, uses non-glutaraldehyde cross-linking tissue treatment technology to effectively remove the effect of valve calcification caused by glutaraldehyde on valve life, thus greatly improving the durability and biocompatibility of artificial valves. This product is currently in a clinical state. It is expected to be on the market in 24-25 years, and the clinical progress of this product is ahead of similar domestic products. The fourth generation product TaurusApex uses polymer materials instead of biomaterials, which is expected to further improve the durability and biocompatibility of artificial valves, simplify the manufacturing process and reduce production costs. This product is currently in the stage of animal experiments. The company cooperates with Jenavalve to introduce the domestic Triology aortic valve intervention product, which is currently the only CE certified product for the treatment of aortic regurgitation and aortic valve stenosis, and the company is currently preparing the domestic technology transfer of this product as well as the first human implantation in Guangdong-Hong Kong-Macau Greater Bay Area.

Mitral valve and tricuspid valve intervention field: the transcatheter replacement product HighLife developed by the company adopts the concept of annular valve, which is composed of a valve prosthesis and an annular valve ring, which automatically centers and aligns when the valve prosthesis is delivered to the mitral valve position, realizing self-adaptation and self-coaxial. HighLife is also another innovative product that has entered the "green channel" of special approval for innovative medical devices in the field of structural heart disease after the third generation of transcatheter aortic valve replacement products of TaurusOne, TaurusElite and TaurusNXT. At present, this product is conducting registered clinical trials in China. GeminiOne, a mitral valve edge-to-edge repair product developed by the company, was the first patient to complete a domestic multicenter registered clinical trial at the end of 22. In cooperation with inQB8, the company successfully completed the world's first human (FIM) clinical implantation of MonarQ, a transcatheter tricuspid valve replacement product, at the end of 22. The company's second and tricuspid valve repair and replacement product research and development progress occupies a leading position in the domestic market.

Neural intervention product portfolio layout has initially taken shape, and innovative products have gradually entered a rapid release period after the listing of innovative products. From the point of view of product layout, the company has three kinds of spring coil products on the market and is developing the latest hot melt release coil products. As an important supplement to the existing product line, it fully meets the diversified needs of clinical operators. The coil auxiliary stent being developed by the company can assist coil products in the treatment of complex, wide-necked intracranial aneurysms. In addition, the company obtained a number of therapeutic and pathway products for hemorrhagic and ischemic stroke in 2022.

We believe that the product layout of the company's nerve intervention business plate is constantly improving, strengthening the company's comprehensive competitiveness in the industry, and the company's nerve intervention business is expected to usher in rapid development.

The company is driven by two wheels of valve and nerve intervention business, and is optimistic that the long-term development company is a leader in the field of cardiac valve intervention in China. Since the commercialization of Q4 in 21 years, TAVR products have good clinical feedback and rapid release of interventional valve products; in addition, the company has a comprehensive and in-depth product R & D layout in the field of aortic valve, mitral valve and tricuspid valve treatment, which is expected to continue to consolidate the company's leading position in the field of heart valve. The company's neural intervention business is in the forefront of domestic companies. With the continuous enrichment of the product pipeline under development and the continuous promotion of the commercialization of certified products, the company's neural intervention business is expected to maintain rapid development.

We expect the company's operating income from 2022 to 2024 to be 2.60,4.55 and 741 million yuan respectively, with year-on-year growth of 90.3%, 75.2% and 62.9% respectively, and the return net profit is-3.96,3.06 and-103 million yuan respectively, and the loss has narrowed year by year. In 2022-2024, the total milestone payable for the company's existing Becton Dickinson & Co project is about 7.0-830 million yuan. if the impact of the one-time fee is excluded, we expect the company's adjusted net profit to turn around in 2024. Give a buy rating.

Risk hint

1) the price reduction of centralized volume procurement is more than expected: the company's products may be included in collection in 2023, and the company may adjust the ex-factory price of related products after landing, which will affect the company's performance growth.

2) intensified competition in the industry: there is competition in the heart valve intervention and nerve intervention market, each manufacturer may adopt different competition strategies according to its own market position, and do not rule out the strategy of low-price competition among individual manufacturers, which aggravates the competition in the industry.

3) the market promotion is not as expected: if the current commercial product expansion market progress is later than the market expectation, the performance growth of the related companies may be affected to a certain extent.

4) the progress of pipeline research is not as expected: the barrier of research and development in the field of cardiac valve intervention and nerve intervention is high, the clinical operation of related surgery is difficult, and the progress of research and development of some products under research may be lower than that expected by the market.

5) repeated COVID-19 epidemic situation: if the COVID-19 epidemic occurs repeatedly, it will affect the supply chain, production capacity and downstream dealer sales of the whole industry, which will put pressure on the overall performance of the industry.