Incident: 1. The company issued a voluntary disclosure announcement for the semi-annual results forecast for 2024. In the first half of 2024, the company expects to achieve revenue of 7.77-0.808 billion yuan, an increase of 25%-30% over the previous year, and is expected to achieve net profit of 0.391-0.419 billion yuan, an increase of 40%-50% over the previous year. 2. MICROPORT ENDOVASTEC B.V., a wholly-owned subsidiary of the company, intends to transfer 72.37% of OptimumMedical Device Inc. After the transaction is completed, OMD will become a wholly-owned subsidiary of the company.
Core products for vascular intervention continued to gain strength, and performance continued to increase in the single quarter. According to the performance forecast calculation, the company is expected to achieve operating income of 0.419-0.45 billion yuan in the second quarter, an increase of 25%-34% over the previous year. The company is expected to achieve net profit of 0.207-0.235 billion yuan in the second quarter, an increase of 34%-52% over the previous year. Since the second quarter, the company has continued to develop municipal and county-level submerged hospital markets. Several core products such as Castor branched thoracic aortic stents, Minos abdominal aortic stents, and Reewarm drug balloons accelerate terminal penetration. The number of admissions and terminal implants for the novel straight tube stent Talos and the novel intraoperative stent Fontus all achieved rapid growth, driving the company's single-quarter performance to grow rapidly. Looking at the subregion, the company is further speeding up market entry and promotion of aortic and peripheral interventional products such as HLP in Europe, Latin America, Asia Pacific and other countries, and actively promoting pre-marketing clinical trials of various new products in Europe and Japan. We expect the company's overseas business to continue to grow rapidly, and domestic business is expected to continue its rapid growth trend.
The merger and acquisition of OMD, a leading provider of vascular intervention, is expected to help accelerate the development of overseas markets. The company plans to use its own capital of 65 million US dollars to transfer 72.37% of OMD's shares. The total equity value of OMD's shareholders as of the end of 2023 is 0.647 billion yuan. The implied market sales ratio of this transaction is 5.66 times. After the transaction is completed, OMD will become a wholly-owned subsidiary of the company. OMD is an industry-leading aortic intervention company. It achieved revenue of 0.112 billion yuan in 2023, an increase of 43.55% over the previous year. OMD lost a slight loss in the first quarter of 2024, and is expected to turn a loss into a profit in 2024, ushering in an inflection point in performance. The company has many years of technical experience in the field of aortic intervention. Its subsidiary Lombard has independently developed a series of advanced manufacturing technologies for laminated stent systems, including automatic preparation, automatic stitching, and automatic polishing. Its aorfix stent product, Aorfix, is one of the best choices for intracavitary treatment plans. The next generation window opening product Altura Fenestration is expected to be approved in Europe; at the same time, it has more than 20 years of product promotion history in developed countries such as Europe, America, Japan, etc., and has an experienced and fully functional team system. This merger and acquisition is expected to enrich the company's product layout in the field of aortic intervention, help the company quickly open up high-end markets such as Europe and the US, and enhance the company's overall competitiveness.
Profit forecast and investment suggestions: According to the company's announcement, we expect that external policies such as collection may cause short-term disturbances, and profit levels are expected to increase further, driven by cost optimization and capacity expansion. The company's revenue is expected to increase by 1.51, 1.919, and 2.425 billion yuan in 2024-2026, up 27%, and 26% year on year; net profit due to mother for 2024-2026 is 0.655, 0.835, and 1.051 billion yuan, up 33%, 27% year on year. Considering that the company is a leading domestic vascular intervention company and has a significant competitive advantage, it is expected to maintain a high growth trend and maintain a “buy” rating with a series of innovative aortic and peripheral intervention products in the future.
Risk warning events: New product development risks, increased risk of market competition, risk that public data used in research reports may be delayed or not updated in a timely manner.