INT Medical unveiled its 2023 results, with revenue up 28.5% YoY to RMB753mn, 11% below our estimate, mainly due to the expanding coverage of provincial VBP in interventional cardiovascular devices and declined surgery volumes in 2H23 due to tight industry regulations. We estimate that VBP-related products accounted for approximately 20% of INT Medical's total revenue. GPM improved by 1.4 ppts to 58.2%, driven by an increasing proportion of sales from the higher-margin products. INT Medical's attributable net profit increased by 18.8% YoY to RMB156mn in 2023, largely in line with our estimate.

Change of company name. In 2023, Kindly Medical (上海康德莱医疗器械 股份有限公司) rebranded itself as INT Medical (上海瑛泰医疗器械股份有限 公司). This change in company name served as a strategic move to establish an independent corporate identity and enhance market recognition of the INT Medical brand.

Remarkable surge in neurological and peripheral devices. In 2023, INT Medical's revenue contributed by neurological peripheral devices was RMB60mn, up 202.3% YoY thanks to the enriching product portfolio. INT Medical secured two NMPA registration certificates for its neurological devices in 2023, including reperfusion catheters ( 颅 内 抽 吸 导 管 ) and microcatheters (微导管). In 2024 YTD, two additional neurological devices, Distal Access Catheter (远端通路导管) and Embolic Protection System (栓 塞保护器), have received approvals from the NMPA. Furthermore, INT Medical continued to expand its distribution and sales network. As of 2023, the company had covered 2,660 (vs. 2,317 in 2022) domestic hospitals. Given the expanding array of products and a strengthening distribution network, INT Medical's neurological device segment is poised for rapid growth in the forthcoming years, in our view.

Positive outlook of overseas market performance. As of 2023, INT Medical had expanded its coverage of overseas customers to 226 (vs. 207 in 2022) across over 77 (vs. 58 in 2022) countries and regions, with 36 CE- certified products and 18 FDA-approved products. In 2023, the overall overseas revenue increased by 36.9% YoY to RMB203mn in 2023, which accounted for 27.0% of the company's total sales. Notably, markets outside of the US and Europe accounted for 15% of INT Medical's total revenue, becoming the major sources of the company's overseas revenue. We expect INT Medical will continue to sustain its strong growth momentum in the overseas market in 2024E.

Maintain BUY. We estimate INT Medical's revenue to grow by 30.1% YoY and attributable net profit to increase 27.1% YoY in 2024E. We revise our TP to HK$35.04 based on a 9-year DCF model (terminal growth rate: 2.0%, WACC: 10.73%).