Key points of investment
The cryointerventional industry is growing rapidly
The company is a leader in the field of cryointervention. Currently, commercial products are bladder cancer cryoablation systems. The pipeline includes vascular cryointerventional systems and natural cavity cryointervention systems, which are used to treat atrial fibrillation and high blood pressure; chronic obstructive pulmonary disease, asthma, airway stenosis, bladder cancer, gastric cancer, and esophageal cancer, respectively. The cryointerventional industry has entered a period of rapid growth. The number of cryoablation surgeries in China increased from 0.98 million in 2020 to 224,900 in 2030. The CAGR was 36.9%, which is much higher than 21.1% of radiofrequency ablation.
The curative effects of interventional cryotherapy are outstanding. The company's products are at the forefront of innovation through exchanges with well-known experts presiding over clinical trials of cryointerventional systems such as Zhongshan Hospital, Huashan Hospital, and Shanghai Tenth Hospital. Cryointervention has obvious advantages in treating hypertension and atrial fibrillation, easy to operate, and has few side effects; interventional respiratory cryotherapy systems have remarkable curative effects on clinically difficult diseases such as chronic obstructive pulmonary disease, asthma, and benign and malignant stenosis. The treatment of tumors such as bladder cancer includes both local physical therapy and systemic immunity, and the application prospects are extremely broad. Currently, cryotherapy is in the early stages of development and is about to enter a period of rapid growth, and the company is a leader in the industry. The market space for interventional treatment is large, and there is plenty of room for cryointerventional treatment. The cryotherapy atrial fibrillation system was approved for sale in December 23, and is expected to be rolled out quickly and drive the company's performance growth. The cryotherapy hypertension system is expected to be approved for sale in the second half of '25, and there is plenty of room for treating high blood pressure.
The company has a reasonable hierarchy of cryointerventional products. Innovative devices are launched every year, and the cryotherapy atrial fibrillation system has been approved for sale. It is expected to be released quickly and drive the company's performance growth. The cryotherapy high blood pressure system is expected to be approved for sale in the second half of '25, and there is plenty of room for treating high blood pressure. In terms of the respiratory system, the cryoablation system for malignant respiratory stenosis is expected to be approved for sale in Q4 '24, the cryoadhesion treatment system will be approved for sale in Q1 '24, and the cryoablation system for COPD and asthma is expected to be approved in the second half of '26. In terms of interventional cryotherapy systems, the bladder cancer cryoablation system was marketed and successfully commercialized in '22, and cryoablation systems for gastric cancer and esophageal cancer are also being actively deployed.
First coverage, given a buy rating, with a target price of HK$28.00:
The company is a leader in the field of refrigeration intervention. It is expected to experience rapid growth with the launch of new products. It is estimated that revenue for 2023-25 will be RMB 41 million, RMB 181 million, RMB 358 million, and net profit will be RMB -108 million, -064 million, and -015 million yuan respectively. According to the DCF model, the target price is HK$28.00, which is a purchase rating, an increase of 48.9% from the current price.