The “little giant” enterprise in the domestic minimally invasive endoscopic diagnosis and treatment device industry was covered for the first time, and Angus was given a “buy” rating as a leading domestic minimally invasive endoscopic diagnosis and treatment device company, and has a high market popularity. Domestic coverage of the top three hospitals has continued to be increased, and overseas has launched its own brand products and rapidly expanded them on the basis of consolidating and deepening cooperation with original customers. At the same time, the company continues to optimize product structure design, process production processes and supply chain management, and has successively launched superior products such as replaceable hemostatic clips and bipolar electric knives. The market share in the field of endoscopic diagnosis and treatment is expected to break through at an accelerated pace. We expect the company's 2024-2026 net profit to be 0.271/0.338/0.423 billion yuan, EPS of 3.35/4.18/5.23 yuan, respectively. The P/E corresponding to the current stock price is 15.2/12.2/9.7 times, respectively.

Compared to comparable companies, Angus has a lower valuation, and the company is still in a period of growth. It has great potential to expand into domestic and foreign markets. It has covered it for the first time, and has been given a “buy” rating.

China's internal endoscopic diagnosis and treatment equipment market has entered a period of development and upgrading. There is more room for import substitution. In 2019, the size of China's digestive endoscopy consumables market was 3.73 billion yuan. It is expected to increase to 11.42 billion yuan in 2030, and the 2019-2030E CAGR is 10.71%, maintaining a high growth rate. Currently, the high-end market for minimally invasive endoscopic diagnosis and treatment devices is still dominated by American and Japanese brands, but as domestic companies increase technology investment and iteratively market and sell related products, the technological gap with US and Japanese brands is gradually narrowing, and domestic substitution is already a general trend. The domestic market share of Angus hemostatic clip products has increased to 15.74% in 2022. In the future, as the number of hospitals covered by the company increases, the number of replaceable hemostatic clips and new bipolar products will be further optimized. Even if affected by the domestic collection market, rapid growth in performance can still be expected.

Overseas customer resources are relatively stable, new customers are growing rapidly, and sales of its own brands continue to increase. The company's overseas sales are mainly OEM. Major customer resources are stable, and related products are sold to more than 40 countries and regions, including the United States, the United Kingdom, Germany, Italy, Japan, South Korea, and Australia. The company's overseas revenue in 2023 was 0.245 billion yuan, accounting for 48%. The company continued to explore new markets and new customers through active market behavior, and the number of new overseas customers increased by 35% in 2023. As the company's core overseas driving force, private brand products have begun to bear fruit.

Angus adheres to differentiated innovation, and has an efficient R&D system. Companies with large future development potential establish differentiated development routes for technological innovation, and gradually form an R&D system “guided by clinical needs, product innovation and process optimization as the path, and supported by industry information”. Emphasis is placed on talent team building and R&D investment, and the R&D cost rate has basically stabilized at around 9%. The ability to transform technological achievements continues to increase, and products corresponding to core technologies such as bipolar circuit technology and interchangeable technology have been sold one after another. Many series of products such as soft endoscopic diagnosis and treatment are under development. The company's fundraising project is being implemented. The fund-raising project will help the company expand production capacity, improve the level of automation, improve marketing layout and enhance R&D efficiency, further enhance overall competitiveness and enhance the company's brand image, and is in line with the company's future development plans.

Risk warning: New product promotion falls short of expectations, trade frictions and exchange rate fluctuations, and volume procurement risks.