Incident: The company released its 2023 annual report. The company achieved operating income of 1,187 million yuan (+32.43%), net profit of 492 million yuan (+37.98%), net profit of 462 million yuan (+42.74%), and operating cash flow of 558 million yuan (+67.28%); 2023Q4 achieved operating income of 299 million yuan (+28.63%) and net profit of 104 million yuan (+85.74%), net profit of 97 million yuan (+85.74%) after deducting non-net profit of 97 million yuan ( +100.91%).
The volume of high-quality aorta/peripheral vascular pipelines continued to be released, and annual performance achieved steady and rapid growth. After years of intensive cultivation, the company has an absolute dominant share in the aortic incision treatment market, and won the first peripheral artery stent CROWNUS in China. It has developed a series of related products such as Reewarm PTX drug balloon dilatation catheters, and has developed into a leading enterprise in aortic vascular interventional medical devices in China. The company achieved steady and rapid growth in revenue and profit in 2023, including: ① aortic stents: achieved operating income of 940 million yuan (+28.07%), gross profit margin of 77.37% (+1.29pct), sales increased 27.89% year-on-year, Castor and Minos continued to gain strength, and the new Talos product was successfully admitted and achieved a relatively rapid increase in terminal implants; ② intraoperative stents:
Achieved operating income of 132 million yuan (+54.59%), gross profit margin of 71.95% (-0.98pct), sales increase of 20.44%. The new Fontus branch intraoperative stent system is more suitable for surgical clinical needs, and the terminal achieves better volume; ③ Peripheral and other products: achieved revenue of 115 million yuan (+49.30%), gross profit margin 71.95% (+5.00pct), sales increased by 50.23%. Currently, there are Reewarm PTX, Reewarm, and Ryflumen Four CROWNUS products have been approved, and a complete product line layout has been gradually formed. It is expected to maintain a rapid expansion trend and continue to contribute to performance growth in the future.
The channel layout of the domestic sinking market has been deepened, and innovative products from overseas have been successfully introduced. 1) Domestic:
The company continues to increase its marketing channel layout in second-tier, third-tier and fourth-tier cities and some populous counties, and its product market coverage has further increased. Castor has covered more than 1,000 terminal hospitals, Minos has covered more than 800, and Reewarm PTX has covered more than 900; 2) Overseas: Achieving rapid growth of more than 55% in 2023, sales have now covered 31 countries, and Castor has achieved its first implantation in Singapore and many European countries (in total, in 16 countries); Minos in Turkey and other countries achieved the first implantation (19 countries in total); Hercules Low Profile achieved the first implantation in Singapore and several European countries (in total, 21 countries); and Reewarm PTX achieved the first implantation in Brazil.
The development and launch of new products is progressing in an orderly manner. As of 2023, the company has obtained certification for 13 products and CE certificates for 5 products, gradually forming a complete product line in the field of aortic and peripheral vascular intervention. In terms of new products, self-developed blocking balloons, Cratos, and Vflower have submitted registration data. The pre-marketing clinical trial stage of Aegis II, the Vewatch venous venous filter and Fishhawk mechanical thrombectomy catheter have completed pre-marketing clinical implantation, the HepaFlow TIPS laminating stent system has been approved for the special review process for innovative medical devices (currently in the clinical follow-up phase), and new-generation peripheral bare balloon catheters and fibrous capillary spring rings are all in the registration stage. Test phase.
Investment advice: Cardiac Healthcare is a leading enterprise in the field of aortic and peripheral vascular intervention in China. The performance of its core products has partially reached the international advanced level, domestic and foreign markets continue to expand smoothly, and it is expected to gradually grow into a leading global enterprise in the cardiovascular field in the future. We expect the company's net profit from 2024 to 2026 to be 6.69,00/1,211 million yuan, respectively, up 35.37%/35.07%/34.48% year-on-year, and EPS of 8.06/10.88/14.64 yuan respectively. The current stock price corresponding to 2024-2026 PE is 23/17/13 times, giving it a “recommended” rating for the first time.
Risk warning: Risk of overseas market expansion falling short of expectations, risk of R&D progress falling short of expectations, risk of new product promotion results falling short of expectations, risk of product price reductions exceeding expectations.