Introduction to this report:
The Beijing-Tianjin-Hebei “3+N” Alliance issued a draft for comments on hemostatic seizure volume procurement. The company's share of domestic hemostatic clip revenue has gradually declined, and it has been very effective in expanding categories and developing overseas markets. It is expected that the impact of collection on the report will be limited.
Key points of investment:
Maintain an increase in holdings rating. Considering that collection products account for a relatively low share of revenue, maintain an EPS of 2.49/3.13/3.87 yuan in 2023-2025, and maintain a target price of 104.8 yuan, corresponding to PE33X in 2024, maintaining an increase in holdings rating.
The hemostasis clip starts volume procurement, and changes in volume and price still need to be observed. The Beijing-Tianjin-Hebei “3+N” Alliance issued a draft for public comments on centralized procurement documents for medical consumables. The category list includes hemostatic clips. The company's hemostatic clip is expected to account for more than 50% of the domestic market and is expected to enter Group A. The proposed selection rules are based on the company's declared price from lowest to highest. The selection rate is as high as 70%, and the highest price is not higher than 1.5 times the lowest price.
We expect that there is still some distance between the factory price of the company's hemostatic clip and the terminal price.
Domestic hemostatic clip revenue accounts for a relatively low share. In 2022, the revenue of hemostasis and closure products was 725 million yuan, accounting for about 37%; the gross profit margin was 75.6%, and the gross profit amount accounted for 45%. According to the prospectus, hemostatic clips accounted for 41% of overseas sales revenue in 2018. As the company continues to expand overseas channels, it is expected that the share of overseas revenue of hemostatic clips will increase further in 2023. The domestic share will continue to decline, and the impact of collection on the report is limited.
Expanding categories and developing overseas markets to spread risk has been very effective. ① Since 2022, the visualization business has been developed, and various disposable lenses have been launched one after another. Visualization product revenue reached 190 million in 2022, accounting for 9.6% of total revenue. In 2023, the marketing of disposable internal medicine cholangioscopy admissions and disposable surgical cholangioscopes/bronchoscopes was carried out simultaneously. It is anticipated that revenue scale will decline due to the impact of the external environment, but it is expected to maintain steady growth in the future as installed capacity and clinical scope consumption increase. ② 2023Q3 overseas revenue of 276 million yuan, accounting for 46%, has become an important sales area for the company. The effects of sales channel reforms in the US and European markets are obvious. Since the beginning of the year, overseas private brands and direct sales channels have all experienced rapid growth. In the future, with the further completion of overseas registration certificates, the company's overseas share is expected to further increase.
Risk warning: Product commercialization falls short of expectations, price reduction in volume procurement exceeds expectations, etc.