Incident: Minimally Invasive Brain Science announced its 2023 annual results. In 2023, the company achieved operating income of 666 million yuan (+21.6%), net profit of 135 million yuan, and adjusted net profit of 195 million yuan (+49.5%), turning a year-on-year loss into profit. Performance grew rapidly, and profitability increased dramatically.
[Multi-Ta-produced BL product line SU pushes MM Guanga Gari] fast, and the leading position is expected to be consolidated. The company has a rich product line, and the product structure is continuously optimized.
Hemorrhagic stroke product revenue of 425 million yuan (+42.0%) in 23 years, contributing 64.0% of annual revenue, mainly due to a significant increase in clinical use of the key product Tubridge dense mesh stents and an increase in global sales of NUMEN spring rings; 154 million yuan (+3.2%) for intracranial atherosclerotic stenosis products, mainly from accelerated marketing of Bridge vertebral artery stents; 25.7 million yuan (+394.2%) for acute ischemic stroke, mainly contributed by Neurohawk embolization stents and X- Track remote catheter sales volume; channel product revenue of 59.2 million yuan (-35.9%) is mainly due to the company's operating adjustments to actively reduce the share of agent products in the sales portfolio.
Innovative products have been approved for marketing, and the clinical results are internationally advanced. The company has achieved fruitful research and development results, and the ischemic and pathway product lines have been further improved. A total of 4 products were successfully approved for marketing in 2023, including Tigertriever embolization stents, Wave-Track suction catheters, Queen-Track microcatheters, and Shentu Veyron neurovascular guide wires. NeuroGuard neurovascular balloon catheters were successfully approved in January 2024. At present, the company has approved a total of 18 products and 12 products under development in China. Of these, 4 products have been included in the green channel.
Research results on the application of NUMEN spring rings and Tubridge dense mesh stents have been published in international journals to further verify the safety and efficacy of the clinical effects of the products and enhance international popularity and recognition.
Collecting boosts volume, sinks sales channels, and opens up grassroots markets. The company selected a number of neurological interventions, won the bid and released the rapid release of related products: NUMEN spring rings were added to more than 350 hospitals; Bridge vertebral artery stents were added to about 500 new hospitals, and Henan Province won the exclusive bid; APOLLO intracranial stents developed about 300 new hospitals. The products have covered more than 3,000 hospitals across the country, supporting approximately 167,000 interventional neural surgeries. The company gradually consolidated the primary market, provided training and guidance for primary clinicians through the “Shendiao Feiyan” program and the “100 Brain Magic” fund, etc., and promoted product technology and innovative clinical treatment plans. The company has developed more than 400 new hospitals, of which about 50% are county-level hospitals.
International commercialization is progressing at an accelerated pace, and breakthroughs have been achieved in overseas business. The company's overseas revenue in 2023 was RMB 31693 million (+44.6%), and product sales revenue all increased multiples in APAC, EMEA and LATAM regions.
A variety of major products continue to explore the international market. The company's products have been commercialized in 17 overseas countries, including South Korea, the United States, and Brazil, covering 8 of the top ten countries in the world for neurointerventional procedures.
Production and operation efficiency has improved, and scale effects have gradually been reflected. Supply chain improvements and scale effects have led to an increase in production costs and the share of sales of owned products. In 2023, the company's gross profit reached 512 million yuan, an increase of 30.2% over the previous year. The gross margin was 76.9%, up 5.1% from the same period in 2022, and management expenses decreased by 3.93% pct.
Profit forecast and investment advice: Considering that the company is a leading enterprise in the interventional neuromedical device industry in China, its market share has been steadily ranking first among domestic brands for many years, and various innovative products are expected to be released. The company focuses on independent support for property research and development and innovation. It has a comprehensive commercial product portfolio covering the three vascular diseases of the stroke and many global or national first-of-its-kind products, with outstanding competitive advantages. The company's revenue for 2023-2025 is expected to be 88/11.24/1.45 billion yuan; net profit to mother is 222/3.01/394 million yuan. EPS was 0.38/0.52/0.68 yuan respectively; corresponding PE was 21.34/15.73/12.02 times, respectively, giving a “buy” rating for the first time coverage.
Risk warning: R&D and sales fall short of expectations, increased industry competition, and procurement policy risks.