Introduction to this report:

The company's electrophysiology business and vascular intervention business both maintained rapid growth, in line with expectations, and maintained an increase in holdings rating.

Key points of investment:

Maintain an increase in holdings rating. Maintain the 2024-2026 forecast EPS of 7.13/9.75/12.90 yuan. Refer to the 2024 target PE 61X given by comparable companies, and the target price was raised to 434.88 yuan (originally 342.66 yuan), maintaining the increase in holdings rating.

The performance was in line with expectations. In 2024H1, the company achieved revenue of 1.001 billion yuan (YoY +27.0%, same below), net profit of 0.343 billion yuan (+33.1%), net profit of 0.328 billion yuan (+35.2%); 2024Q2 achieved revenue of 0.546 billion yuan (+24.5%) in a single quarter, net profit of 0.202 billion yuan (+30.8%), net profit to mother of 0.191 billion yuan (+25.5%); Performance continues to grow rapidly and is in line with expectations.

The electrophysiology business is being promoted smoothly, and the layout of atrial fibrillation is about to be improved. The 2024H1 electrophysiology business achieved revenue of 0.223 billion yuan (accounting for about 22% of total revenue, which is basically the same as the revenue share for the full year of 2023). With the help of collection, admissions for core electrophysiology products continued to grow. 2024H1 was implanted in more than 150 new hospitals, covering more than 1,250; the company gradually upgraded from traditional 2D surgery to 3D surgery. The 2024H1 completed about 7,500 3D surgeries in more than 800 hospitals, an increase of more than 100% over the previous year, and the brand strength of the 3D product market continued to improve. Clinical research on the 3D PFA and radiofrequency packages in the field of atrial fibrillation treatment is also progressing steadily. After listing in the future, it is expected to further fill the company's shortcomings in the field of atrial fibrillation treatment and fully enter the wider atrial fibrillation market.

The coronary pathway category provides a stable basic market, and peripheral products contribute new growth points. 2024H1 coronary pathway products achieved revenue of 0.503 billion yuan, and peripheral intervention products achieved revenue of 0.175 billion yuan. The coverage rate and inpatient penetration rate of vascular intervention products have been further increased. The number of admissions for coronary products increased by nearly 20% compared to 2023H1, and the number of admissions for peripheral products increased by more than 30%, covering nearly 4,000 hospitals as a whole. As the company's stable basic market business, coronary pathway products have been widely recognized clinically due to their product performance, and the level of production automation and large-scale production capacity have also been continuously improved, making the market competitiveness continuously enhanced in the context of collection. For the peripheral product line, the company has formed a complete solution for lower limb interventional surgery pathways. In the future, as therapeutic products are launched one after another, competitiveness in the peripheral intervention field will continue to improve, which is expected to contribute new growth points.

Risk warning: Product development has fallen short of expectations, and the increase in the number of surgeries has fallen short of expectations