Introduction to this report:

The company's coronary business is recovering strongly, and the neurological intervention business is expected to stand out from the competition with differentiated blockbuster products. It is covered for the first time, and is rated as an increase in holdings.

Key points of investment:

Covered for the first time, an increase in holdings rating is given. The company's coronary business is recovering strongly, and the neurological intervention business is expected to stand out, driven by differentiated products. It is predicted that 2024-2026 revenue will be 0.476, 0.686, and 0.934 billion yuan respectively, net profit to mother of 0.003, 0.032, and 0.119 billion yuan, and EPS of 0.01/0.08/0.29 yuan in 2024-2026. Referring to comparable company estimates, the 2024 target PS 9X is given, corresponding to a target price of 10.37 yuan. Covered for the first time, an increase in holdings rating is given.

The coronary business is recovering strongly, and new supporting products are expected to contribute to the increase. The number of coronary PCI surgeries in China continues to grow, reaching a year-on-year growth rate of 26% in 2023, and there is still plenty of room for improvement compared to developed countries. The company has been producing coronary stents since 2002, and was unable to participate in the 2020 coronary stent collection due to category rules. The 2021-2022 performance was greatly affected. After two new differentiated stent products won the bid in 2022, the coronary business recovered strongly in 2023, and the year-on-year sales growth rate reached 99%, and the share is expected to continue to increase. Supporting balloon products also continue to be enriched. Among them, the first domestically produced spinous balloon, which was approved in September 2023, won first place in the “3+N” consortium, and is expected to be quickly admitted to the hospital and released, contributing to the increase.

The neurological intervention market has broad prospects, and differentiated products are opening up the market. The domestic neurological intervention market is booming and is in a period of rapid growth. According to Insight Consulting's forecast, China's neural intervention volume CAGR is expected to reach 28.9% in 2020-2026E. The company adheres to the strategic leadership of “deepening ischemia, innovating bleeding, and breaking through pathways”, and has gradually achieved a differentiated layout of all categories in terms of stenosis ischemia, acute ischemia, bleeding and pathways. In terms of stenosis ischemia, the Neuro RX intracranial balloon approved in 2016 was one of the first domestically produced intracranial balloons to be approved, laying a solid foundation for the subsequent expansion of the neurological intervention business; the NOVA stent approved in July 2021 is the only drug-carrying intracranial stent in China and is currently in the rapid dosage period; COMETIU clinical data is positive, and is expected to be approved soon, complementing NOVA. In terms of acute ischemia, major products such as distal access catheters, thrombosuction catheters, and embolization stents were intensively approved in 2023 and 2024Q1, and it is expected to seize the fastest growing acute ischemia market segment. In terms of bleeding, the secret network stent is expected to be registered in 2024 to make up for the company's shortcomings in the field of bleeding. Through a strategy driven by differentiated flagship products, the company's neurointervention series products are expected to stand out from market competition and achieve rapid growth.

Catalysts: Major products under development have been approved, and the number of new products released has exceeded expectations

Risk warning: The progress of major products under development falls short of expectations, and market competition increases risk