Performance Brief

On August 22, 2024, the company released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 1.001 billion yuan, +27% year over year; realized net profit of 0.343 billion yuan, +33% year over year; realized net profit without return to mother of 0.328 billion yuan, +35% year over year.

2024Q2 achieved revenue of 0.546 billion yuan, +25% year over year; realized net profit of 0.202 billion yuan, +31% year over year; realized net profit without deduction of 0.191 billion yuan, +26% year over year.

Management analysis

Product admission promotion is progressing smoothly, and the volume of 3D electrophysiology surgeries is growing rapidly. In the first half of the year, the company's electrophysiology products achieved revenue of 0.223 billion yuan, implanted more than 150 new hospitals in China, and completed about 7,500 3D electrophysiology surgeries in more than 800 hospitals. The number of surgeries increased by more than 100% over the same period in 2023. The adjustable curved 10-pole coronary sinus catheter continues to maintain a leading share in this category market segment. The adjustable curved sheath tube was approved through a volume procurement project, and the usage volume exceeded 5,000 in the first half of the year. Coronary access products achieved revenue of 0.503 billion yuan, an increase of nearly 20% over the same period last year; peripheral interventional products achieved revenue of 0.175 billion yuan, and domestic admissions increased by more than 30%, covering nearly 4,000 hospitals as a whole.

International business has grown steadily, and independent brands have become the main driving force. The company's international business continued to grow, achieving revenue of 0.116 billion yuan, an increase of 19.73% year on year. Coronary and peripheral independent brands and independent electrophysiological brands continued to be the main driving force for the company's international business growth. The coronary and peripheral independent brand business increased 43.77% year on year in the first half of the year; independent electrophysiological brands increased 63.04% year on year; and OEM increased -20.18% year on year.

Production lines are continuously expanded and optimized, and the manufacturing side maintains strong competitiveness. The company expanded and optimized the production line for electrophysiological consumables, and production capacity increased by more than 50% over the same period last year. The second phase of the new Ept plant project in Hunan (a finished product production plant mainly a purification workshop) is under infrastructure construction. The main project will be completed in the fourth quarter of this year, and it is expected to be put into operation in the first half of 2025. After the new plant is fully put into operation, the annual production capacity of vascular interventional products can reach 4 billion yuan.

Profit Forecasts, Valuations, and Ratings

We expect the company's net profit to be 0.709, 0.972, and 1.298 billion yuan respectively in 2024-2026, up 33%, 37%, and 34% year-on-year. The PE corresponding to the current price is 50, 36, and 27 times, maintaining the “buy” rating.

Risk warning

Health insurance fee control policy risk; risk of developing projects falling short of expectations; risk of product promotion falling short of expectations; exchange risk