Dental implant collection is expected to promote the rapid growth of oral repair film industry, and the performance-to-price ratio of the company's oral repair membrane products is obviously better than that of foreign investment. In 2020, the market scale of China's oral restoration film (factory caliber) reached 1.35 billion yuan, an increase of 25% over the same period last year. The compound growth rate of the market in 2016-2020 was 29%, and the overall growth rate was relatively high. The dental implant industry has maintained rapid growth in recent years, and the collection of dental implants has led to the continuous expansion of the oral restoration membrane industry. There is no obvious gap between the company's products and Geiger's products, with a higher performance-to-price ratio, compared with other domestic products have obvious competitive advantages, is expected to gradually achieve import substitution.

The artificial dura mater market ushered in a period of intensive collection, and the company's products won the bid in the main collection areas. According to the head Leopard Research Institute, the artificial dura mater market reached 5.98 billion in 2020, an increase of 11.2% compared with the same period last year. Since 2020, dura mater patches have been purchased in a number of provinces and cities, with an average price reduction of about 80%. At present, the company's products have won the bid for artificial dura mater collection in major provinces, the regional market share has been guaranteed, and the bargaining power of dealers has been significantly improved.

The blockbuster product active biological bone has been approved, and its performance is expected to surpass that of similar products of Medtronic PLC. The market size of orthopedic bone defect repair materials is expected to reach 2.85 billion yuan in 2014, the compound growth rate will reach 16.8% in 2020-2020, and the market size in 2023 is expected to reach 5.34 billion yuan. Active biological bone has strong activity of inducing osteogenesis and repairing bone defect. The company's blockbuster active biological bone products were approved in October 2022, and the clinical trial results are excellent, which can meet the clinical needs. The standard Medtronic INFUSE Bone products are expected to bring broad growth space.

Cover for the first time, giving a "buy" rating. It is estimated that the company's EPS in 23-25 will be 1.20 PE 1.60 pound 2.04 yuan. Combined with the results of relative valuation method, we give Zhenghai organism 34 times PE in 2023. It is expected that the company's 2023 EPS will be 1.20 yuan, corresponding to the company's 2023 target price of 40.8 yuan. Based on the company's rich product structure, active biological bone is expected to bring significant increment, covering for the first time and giving a "buy" rating.

Risk tips: growth risk, R & D less than expected risk, main product concentration risk, industry policy risk, product quality risk, etc.