Incidents:

The company released its 2023 annual report and 2024 quarterly report: in 2023, the company achieved operating income of 343 million yuan (+77.9%), net profit attributable to mother of 39.63 million yuan (+75.6%), and net profit not to mother of 497.14,600 yuan (+69.9%). In the first quarter of 2024, the company achieved operating income of 91.06626 million yuan (+24.5%), net profit attributable to mother of 2.4986 million yuan (+115.4%), after deducting non-return net profit of 177.92 million yuan (+12.3%).

Comment:

Coronary domestic mining and production volumes are driving rapid growth in performance. HT Supreme and HT Infinity selected the 2023-2025 national procurement volume, with an intended purchase volume of about 50,000 items in the first year, and was selected by more than 1,000 hospitals; in 2023, the company's coronary business revenue increased 99.10% year on year. Among them, coronary stent revenue increased by 145.44% year on year, and sales of coronary stent products reached a record high, up 437.32% year on year.

The company's coronary balloon products continue to maintain a good collection trend, and sales have further increased. During the reporting period, the company's spinous balloon and HT Infinity were approved domestically, SC HONKYTONK coronary balloon expansion catheter was approved by the FDA, the product matrix continued to improve, and overseas business progressed steadily.

The differentiated layout of neural intervention is beginning to take shape, boosting the steady rise in business. In 2023, the company's revenue in the neurological intervention segment increased by 60.59%, with revenue from intracranial balloon and intracranial stent products increasing by 10.98% and 277.96%, respectively. The company gradually realized the differentiated layout of all categories of neurological intervention. In 2023, a total of 8 products, including remote channel catheters and intracranial thromboaspiration catheters, were approved domestically. A total of 13 products covering stenosis ischemia, acute ischemia, and pathway neurological intervention products were on sale. The sales channel coverage was further improved, and it has entered nearly 2,000 hospitals across the country; the world's first self-developed intracranial self-expanding drug stent passed the innovative medical device approval at the end of March 2024.

Open up a blank international market, accelerate overseas business layout, and internationalization is beginning to take shape. In 2023, the company achieved international sales revenue of 10.1686 million yuan (an increase of 22.31% over the same period). Coronary intervention products have obtained nearly 50 registration certificates and gradually achieved sales in nearly 20 countries and regions, including Asia, Europe, the United States, the Middle East, and Latin America; in 2023, the company reached a strategic cooperation with Suzhou Runmed Medical Technology Co., Ltd. on PIONEER IV clinical research and commercial cooperation; the company acquired American eLum, which is engaged in the development of neurological interventional devices, further enhancing the innovation and R&D capabilities of neurological products and enriching the company's international layout in the neurological field.

Profit forecast and investment advice: Sano Healthcare is a leading domestic coronary and neurological intervention company. The national procurement of coronary stents has been selected again. The product line in the field of neurological intervention continues to be enriched, and the overseas layout is progressing steadily. We expect the company's revenue for 2024-2026 to be 5.03/7.61 billion yuan, net profit to mother of 0.14/0.68/128 million yuan, and corresponding PE of 342X/70X/37X. For the first coverage, we gave it an “gain” rating.

Risk warning: new product development risk, risk of sales falling short of expectations, increased risk of market competition, etc.