A rapidly growing leader in neurosurgical implantation medical devices
The company is the only high-tech enterprise in the field of neurosurgery in China that also has implanted medical device products such as artificial hard (spinal) membrane patches, craniofacial repair systems, absorbable regenerated cellulose oxide, dural membrane medical glue, etc., covering the key implantable medical devices required for craniotomy surgery. The size of the company has grown rapidly in recent years: the revenue CAGR for 2018-2022 reached 22.8%.
The number of neurosurgical craniotomies is growing rapidly, and the consumables market is rapidly expanding in terms of cerebral hemorrhage in traffic accidents. According to the National Bureau of Statistics, the number of people injured in traffic accidents in China in 2021 was 281,000, and the average annual CAGR for 2015-2021 was 5.9%. In terms of hypertensive cerebral hemorrhage and brain tumors, according to the “China Health Statistics Yearbook”, the number of people discharged from public hospitals in China in 2019 was 1,343 million, with an average CAGR of 5.5% for 2015-2019; the number of discharged patients with malignant brain tumors was 33,000, and the average annual CAGR for 2015-2019 was 9.1%. According to the company's prospectus, the number of neurosurgical craniotomies in China was about 700,000 in 2019, and it is expected to grow steadily. According to data from the Southern Institute, the domestic neurosurgical consumables market reached 6.1 billion yuan in 2023, and the average annual CAGR for the period 2018-2023 was 11.1%.
Neurosurgical products continue to be enriched and expanded to multiple departments. Platform-based medical device brands are developing companies focusing on neurosurgical needs and providing overall solutions covering various clinical needs such as neurosurgical meningeal repair, skull repair and fixation, and rapid hemostasis. Among them, artificial meninges and cranial repair and fixation products are expected to benefit from volume procurement to further increase market share, and the newly launched Ruigu? Medical dura glue and Yoshitatei? Absorbable regenerated cellulose oxide hemostatic products have promoted the establishment of hemostatic and medical rubber product lines, and the competitive pattern between the two is excellent, and is expected to achieve rapid growth. Furthermore, on the basis of maintaining a competitive advantage in the field of neurosurgery, the company extends the application of the technology platform to stomatology and other surgical fields, and is expected to gradually grow into a platform-based medical device company.
Investment advice and profit forecasting
Due to changes in external policies and adjustments in marketing policies, the rapid penetration of PEEK material products, and the continuous approval of new products, the company's 2023-2025 revenue is expected to be 2.1/2.7/350 million yuan, respectively, with a growth rate of 9.2%/26.2%/29.2%, respectively; net profit is 37.1/49.9/78.7 million yuan, with a growth rate of 3.3%/34.5%/57.7%, respectively; EPS is 0.6/0.8/1.2 yuan/share, corresponding PE is 77.4/57.5/36.5X. First coverage, giving a “buy” rating.
Risk warning
There are risks such as increased competition in the industry, the country's volume procurement price reduction, and overseas development falling short of expectations.