Bai Xin'an is a leading innovative invasive cardiovascular device company in China, focusing on the research and development of fully degradable stents (BRS) and renal nerve occlusion (RDN). At the core of the company, the product pipeline is innovative, adapts to a wide range of people, has a large market space, and the R & D progress is leading. 2024 is expected to be the first year of commercialization of the company.

RDN-Iberis products: ten billion yuan market for interventional therapy for hypertension, which is expected to be the first to be approved in China. There are more than 300 million patients with hypertension in China. At present, drug therapy plus lifestyle intervention is the only two treatment methods, but there is the problem of low drug compliance and a large number of drug-resistant people, resulting in a control rate of only 18% of Chinese patients with hypertension. A new treatment is imminent. Interventional therapy for hypertension has a long clinical history, in which radiofrequency ablation of renal nerve has the most solid basis, and it is also the most effective and sufficient clinical evidence for non-drug treatment of hypertension. At present, neither China nor the United States has commercial products on the market, and the FDA expert group meeting will soon be launched in August this year, and the progress of RDN approval in the United States is expected to accelerate. Bai Xin an's RDN product Iberis has completed its clinical application in 2023 and submitted an application for registration in 23Q2, making it one of the fastest growing RDN manufacturers in China. If all goes well, it is expected to be approved in 2024. Iberis is the only renal artery ablation product in the world that can provide two interventional methods, and has a smaller catheter sheath size, so it is expected to quickly seize the market by virtue of its first-mover advantage and strong product performance.

BRS-Bioheart products: the second generation of fully degradable stent is also expected to become the first approved in China. Percutaneous coronary intervention (PCI) is one of the most common and mainstream methods for the treatment of coronary artery disease. In recent years, the penetration rate of PCI surgery in China has increased rapidly. In 2021, a total of 1.16 million PCI operations were completed in the mainland. Among them, as the latest generation of coronary stent technology, the permeability of fully degradable stents has been gradually improved by virtue of its excellent performance. From 2016 to 2019, the use of fully degradable stents in global PCI surgery increased from 2.2% to 2.5%. But at present, the use of fully degradable stents in China is still in its infancy, and the performance of the second generation of fully degradable stents is improved compared with the first generation, but the second generation market is still relatively blank. As the first domestic manufacturer to lay out the second generation, Baxin is expected to be approved in 2024.

Profit forecast and investment advice: the two products that the company is about to commercialize have large market space, considering that the two products are cutting-edge innovative products, and there are no similar commercial products on the market in China at present, our calculation of these two products is out of conservative considerations. According to DCF calculation, the corresponding equity value of the company is 3.2 billion yuan, and the corresponding share price is 13.05 yuan, or 14.04 Hong Kong dollars, covering for the first time and given a "buy" rating.

Risk hint: the progress of product listing is not as expected; the risk of price reduction is collected; post-market sales are not as expected.