The performance was in line with expectations, and both at home and abroad went hand in hand. In 2023, the company achieved revenue of 329 million yuan, +26.5% year-on-year, net profit of 06 million yuan, +85.2% year-on-year, and net profit of -35 million yuan after deduction. Among them, 23Q4 achieved revenue of 93 million yuan, +36.1% year-on-year. In 2023, looking at the subregion, domestic revenue increased 17.15% year on year, covering more than 1,000 hospitals, totaling more than 50,000 3D surgeries, and the company actively participated in volume procurement. In DRG payments and electrophysiological volume procurement by medical institutions in Beijing, the company won bids for all products such as TrueForce pressure catheters, which were implemented in December 2023; international market revenue increased 59.5% year on year. The company is firm in its global development strategy to continuously increase overseas clinical usage. By the end of 2023, 35 countries and regions had been covered, and a total of 21 products had obtained CE certification.
Continue to promote R&D and innovation, and have abundant reserves in the research pipeline. In August 2023, the company's cryoablation series products were first approved for sale, becoming the first domestic product for atrial fibrillation treatment in this field. Up to now, more than 20 provinces have been connected to the Internet. In terms of the research pipeline, the pressure pulse ablation catheter project has entered the follow-up phase; the renal artery ablation project has entered the clinical trial stage. Second, the company continues to promote cooperation with Stereotaxis. Its core product, the fifth-generation “Panvascular Interventional Robotic Magnetic Navigation System”, is expected to receive NMPA registration approval in 2024.
The market space for cardiac electrophysiology is vast, and the company is expected to fully benefit. Cardiac electrophysiology is rapidly evolving, but the market competition is fierce. According to Frost & Sullivan, the localization rate in this field was only 9.6% in 2020. In the future, the import substitution process may accelerate as domestic enterprises continue to advance and collect. The company has a rich product line and leading advantages in many fields: in 2023, the company ranked third in domestic surgery volume and domestic manufacturers ranked first; at the same time, the company took the lead in breaking through compared to other domestic manufacturers in the field of atrial fibrillation, and has a clear first-mover advantage, which is expected to benefit from the rapid development trend of the industry.
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Currently, many of the company's products have been included in the collection, so we have lowered the catheter revenue and gross profit margin. At the same time, the company's new products are being launched one after another, so the sales expenses rate and management expenses ratio have been raised. We forecast that the company's net profit for 2024-2026 will be 37, 80, and 119 million yuan respectively (the original forecast was 77 and 133 million yuan for 2024-2025). Considering that the company is a domestic technology-leading electrophysiological equipment and consumables company, the products listed and under development have core technical barriers, and the R&D progress is at the forefront of peer companies, and there is sufficient long-term development potential, we adopted the DCF valuation method to give a target price of 26.32 yuan, maintaining the “gain” rating.
Risk warning
Sales and product promotion fall short of expectations, product development progress falls short of expectations, risk that assumptions that fall short of expectations will be unfavorable to valuation, etc.