The heart valve track continues to grow high, and the minimally invasive trend is to catalyze the release of the valve.
The structural heart disease track will be the golden track for the next decade. The "aging trend + minimally invasive treatment concept" has led to a rapid increase in the number of valvular interventional surgery. Transcatheter valve replacement (TAVR) transforms surgical thoracotomy into vascular interventional surgery for the first time, which subverts the traditional treatment pattern. Under the full verification of the safety and effectiveness of aortic valve interventional therapy, the interventional therapy of mitral valve and tricuspid valve is expected to be further developed. According to Frost Sullivan's forecast, the market size of valvular intervention in China (aortic valve, mitral valve, tricuspid valve, pulmonary valve) is about 45% of 2023-2030 CAGR, and the market size is expected to reach 42 billion yuan in 2030.
Tricuspid valve large single: 20 billion yuan deep blue market has a huge rigid demand, the company's products lead the world
Tricuspid valve treatment has always been regarded as a "forgotten disease". According to statistics, the treatment rate of tricuspid valve disease in the United States is only 0.80%, which is much lower than 18.00% of aortic valve disease and 1.75% of mitral valve disease. The stock of tricuspid regurgitation patients in China is about 10 million, with an increase of about 1 million every year. According to Frost Sullivan's forecast, China's tricuspid regurgitation market is expected to grow to 20 billion yuan in 2030, much higher than the TAVR market in the same year. The tricuspid intervention market is still in a deep blue competition pattern. At present, only three tricuspid intervention products in the world are in confirmatory clinical practice, namely the company's LuX-Valve and LuX-Valve Plus and the international giant Edward Life Sciences EVOQUE, which is more than 3 years ahead of similar domestic replacement products. LuX series products are as good as Edward in key properties such as valve diameter, and are expected to win the title in the tricuspid valve market. The company's first major tricuspid valve new product, LuX-Valve, is expected to be certified in Q4 in 2023, and at the same time to promote the internationalization of the second generation product LuX-Valve Plus in China, Europe, North America and Asia-Pacific markets in 2024.
Adhere to independent R & D and innovation to fully cover structural heart disease
The company does not do "me too" products, do not take the imitation route, the products are independent research and development, to achieve a complete structural heart disease product pipeline layout, fully covering tricuspid valve, aortic valve, mitral valve, heart failure and cardiogenic stroke protection. In valvular heart disease, the company distributes tricuspid valve replacement system (LuX series), TAVR system (Ken series, for aortic regurgitation or associated stenosis), mitral valve repair and replacement system (Jens series); in the field of heart failure, the company distributes atrial septal stent system and myocardial filling hydrogel (MicroFlux, AIginSys); in the field of cardiogenic stroke protection, the company distributes left atrial appendage and PFO occluder (SimuLock, OminiSeal). The complete layout of structural heart disease fully ensures the company's continued growth and commercialization in the future.
Investment suggestion
We expect the company's operating income to reach 25.8 million yuan, 229 million yuan and 619 million yuan respectively from 2023 to 2025, an increase of 788.2% and 170.1% year-on-year from 2024 to 2025, and a net profit of-418 million yuan,-392 million yuan and 7 million yuan. Considering that the company is not yet profitable, we adopt the average market-to-sales ratio (PS) of comparable companies as the valuation reference of Jianshi Technology:
As of October 12, 2023, the average PS of H-share comparable companies in 2023-2025 is 2023 times higher than that in 14-10-7, and we predict that the company's PS in 2023-2025 will be double that in 460-52-19. The company's average PS multiple is higher than the industry average, mainly because once the company's tricuspid valve business is commercialized, it will form a rapid breakthrough at the revenue end, strong profit expectations and high growth. The company's first tricuspid valve replacement product belongs to the global FIC innovative medical devices, with huge market potential and good competition pattern. We are optimistic about the company's ability to rapidly commercialize and bring revenue breakthroughs as well as the expectation of globalization of large items. Cover for the first time, giving a "buy" rating.
Risk hint
Product R & D progress and commercialization are not as good as expected risks, domestic policy risks, geopolitical risks.