Incident: The company announced its 2023 annual results announcement, achieving operating income of 528 million yuan (+58.0%), net profit to mother of 7.873 million yuan (+30.7%), deducting 7.033 million yuan (+127.18%) of which neurovascular intervention revenue was 382 million yuan (+63.6%); peripheral vascular intervention revenue was 145 million yuan (+43.7%). For the first time in three years since listing, losses were deducted and losses were not reversed, and performance growth was strong.
A variety of new products have been launched intensively, and the leading advantage of peripheral intervention has been highlighted. In 2023, the company approved a total of 17 products, including 4 iterative products of existing products. It is expected to maintain the rapid product implementation trend for the next two years. At present, the company has strategically laid out 64 products and candidate products. A total of 39 products are listed domestically. The comprehensive and differentiated product portfolio brings a strong competitive advantage. In the field of peripheral intervention products, on the one hand, over the past 24 months, the company has independently developed and launched 5 products, including the ZYLOX Penguin static to iliac venous stent system with the three innovative elements of “oblique design, conical gradation, and integrated structure”. It has been approved one after another. Tongqiao Kirin? The blood flow guide device was approved on March 25, '24 as the first fully developed remote closed mesh stent made in China; on the other hand, a strategic cooperation was reached with Avinger Inc., an innovative medical device company in the US, to continue to introduce innovative products such as OCT imaging-guided peripheral vascular artery plaque removal devices and devices for chronic complete peripheral vascular occlusion, building a moat in the field of PAD interventional devices and strengthening the market leading position with the most comprehensive venous interventional treatment products.
Mining is expected to increase in volume, and the market share will further increase. The company won the bid collection volume of spring rings in many provinces, and is expected to continue to grow in the future. In 2023, almost all procurement lines were covered in Henan Province. A total of 7 products were bid for, and the admission rate was close to 100%, accounting for the highest domestic market share. In the results of the Beijing-Tianjin-Hebei “3+N” Alliance's proposed selection of 28 types of medical consumables for volume procurement announced in March 2024, the company's embolization stents and intracranial support catheters were selected as the first in Group A, which is expected to be distributed 20% of the agreed procurement volume in the category, further helping the company increase its market penetration rate.
Domestic and foreign markets have two-wheel drive, and overseas business continues to gain strength. The company is actively expanding the international market, with overseas revenue of 1,427 million yuan (+83.1%) in 2023. At present, the company has a total of 8 products that have obtained CE certification within the European Economic Area, 5 products have been approved in the UAE region, and various other products have been approved in overseas countries such as Germany. The commercial sales scope of products has been expanded to 19 overseas countries including the European Union, the Middle East and South America, and will continue to expand into North Asia and Southeast Asia. In the future, the company will continue to enhance product quality recognition and international influence.
Profit forecast and investment advice: Considering that the company is a leader in domestic neurological and peripheral vascular intervention, fully benefiting from the rapid growth of the industry and import substitution, it is expected that the domestic market penetration rate will continue to increase, and overseas marketing efforts will continue to increase, and it is expected to maintain a high level of growth. The company's revenue for 2024-2026 is estimated to be 759/10.49/1,398 million yuan, net profit due to mother is 0.69/1.42/222 million yuan, EPS is 0.21/0.43/0.67 yuan, respectively, and the corresponding PE is 43.06/21.05/13.44 times, respectively. Covered for the first time, a “gain” rating was given.
Risk warning: R&D and sales fall short of expectations, increased industry competition, and procurement policy risks.