A domestic electrophysiology leader with a complete product line, driving high growth with dual engines at home and abroad. The company has been deeply involved in the field of electrophysiology for more than ten years. It is the first domestic manufacturer that can provide a complete solution for 3D cardiac electrophysiology equipment and consumables. In 2023, the total number of 3D electrophysiology surgeries exceeded 50,000, ranking first among domestic manufacturers. Heavy products such as high-density labeling, pressure ablation, and frozen ablation catheters continued to be approved, driving rapid revenue growth. In 2023, the company achieved revenue of 329 million yuan, and the 2015-2023 revenue CAGR reached 31%. The company adheres to two-wheel drive at home and abroad, and achieved overseas revenue of 69 million yuan in 2023. Overseas revenue CAGR reached 43.59% in 2018-2023, and the potential to go overseas can be expected.

The cardiac electrophysiology industry is booming, and there is plenty of room for domestic alternatives. China's electrophysiological device market is rapidly growing due to multiple factors such as obvious advantages of electrophysiological surgery, large patient base, and low surgical penetration rate. The market size in 2021 was 6.58 billion yuan (CAGR of 28.36% in 17-21), and is expected to reach 15.726 billion yuan in 2025 (24.3% CAGR in 21-25). The number of electrophysiological surgeries in China in 2019 was 128.5 units/million, far lower than the 1302.3 units/million in the US. The measurement technology moved from two-dimensional to three-dimensional, and ablation techniques such as radiofrequency, freezing, and pulse continued to change, and the product line was continuously improved and enriched, laying a good hardware foundation for improving surgical penetration. The domestic electrophysiology market has long been dominated by foreign brands such as Johnson & Johnson, Abbott, and Medtronic. In 2020, the market share of the three reached 85%, and the company's share was only 3.1%. In the future, it is expected that they will take advantage of Dongfeng to quickly seize the market through product line expansion.

The electrophysiology production line is complete, and the research and reserve relay is long-term. The company has achieved a collaborative layout of the two mainstream energy platforms of RF+refrigeration, and is developing pulse ablation products steadily to achieve full coverage of the three major platforms of “ice, fire, and electricity”. Major products have been launched one after another, contributing to the growth of performance. 1) Magnetoelectric dual-positioning three-dimensional electrophysiological labeling system: launched in 2016, and the new to fourth generation has been introduced by 2023; 2) High-density measurement catheter: launched in October 2022 to break the import monopoly; 3) Pressure-sensing catheter: the first domestic approved launch in December 2022 to fill the gap in the domestic market; 4) Pulse ablation:

It has good safety and efficacy. The market size is expected to exceed 10 billion in 2030, and the company's products are expected to be launched in 2025; 5) RDN: A new method for treating high blood pressure. The company's RDN products entered the special review process for innovative medical devices in March 2024 and are expected to be approved in 2025.

Sales channels are stable and efficient, and domestic and overseas markets are expanding at an accelerated pace. In the domestic market, the company has established stable cooperative relationships with many dealers, and its products have covered more than 1000 terminal hospitals across the country. The price reduction of electrophysiological harvesting is moderate, and collection is used to accelerate the increase in hospital coverage. In overseas markets, the company has strengthened the establishment of agency channels. The products have been exported to 35 countries and regions including France, Italy, Spain, Russia and South Korea. Overseas revenue increased by 59.49% year-on-year in 2023, and overseas sales prospects are promising.

Profit forecast and investment rating: We expect the company's revenue for 2024-2026 to be 4.65 billion yuan, 6.46 billion yuan, and 890 million yuan, respectively; net profit to mother will be 0.30, 0.68, and 119 million yuan, respectively, up 424.0%, 127.5%, and 74.9% year-on-year respectively, covering the first time and giving a “buy” rating.

Risk warning: sales promotion falls short of expectations; policy risk; new product development falls short of expectations.