The performance is growing rapidly, and we are actively developing domestic and foreign atrial fibrillation markets. With 2024H1, the company achieved revenue of 0.198 billion yuan, +39.6% YoY, and net profit to mother 0.017 billion yuan, +689.3% YoY. Among them, 24Q1 and Q2 achieved revenue of 0.089 and 0.109 billion yuan respectively, +71.0% and +21.4% year-on-year. The company's 2024H1 revenue growth rate is relatively fast, mainly due to increased product sales. Up to now, the total number of 3D surgeries worldwide has exceeded 0.07 million cases. By product, TrueForce? Pressure Catheters, IceMagic? New products such as frozen ablation catheters increased 475% year over year, including TrueForce? Pressure catheters have completed nearly 3,000 radiofrequency ablation procedures guided by pressure monitoring. Looking at each region, the company is going hand in hand in domestic and foreign markets. Domestic TrueForce? Pressure catheters were collected and executed in Beijing, Hubei, and Tianjin to achieve accelerated admission; in overseas markets, the company accelerated expansion, and 3D surgery has covered 36 countries and regions. TrueForce? Among the rapid release volumes of pressure catheters, it has become the single product that accounts for the largest share of 24H1 overseas sales.

Continue to reduce costs and increase efficiency, and the net profit margin has improved dramatically. 2024H1, the company's gross profit margin was 59.1% (YoY -8.5pct), net profit margin 8.6% (YoY +7.1pct). The sharp increase in net interest rate was mainly due to a significant increase in sales scale and active cost reduction and efficiency. 2024H1, the company strengthened domestic substitution of raw materials and carried out partial outsourcing to effectively reduce production costs. At the same time, the company achieved continuous control of various expenses, including a sales expense ratio of 27.7% (-7.3 pct), a management expense ratio of 10.0% (-0.9 pct year over year), and a R&D expense ratio of 19.4% (-9.2 pct year on year).

The energy platform covers a full range, and the research project is progressing smoothly. On the basis of the “RF+Refrigeration” collaborative layout, the company actively promoted PFA project research and development, and achieved many positive R&D results. In terms of new products, the company's pulsed electric field ablation catheter has entered the final stage of clinical follow-up, and the participating company Shangyang Medical's pulsed electric field ablation system has been submitted for domestic registration. Also, FlashPoint? The renal artery radiofrequency ablation system has entered the green channel for innovative devices. In terms of product iteration, Columbus? The software upgrade of the 3D cardiac electrophysiological labeling system continues to be carried out, which can improve the measurement efficiency several times. Overseas, 2024H1's fourth-generation three-dimensional cardiac electrophysiological measurement system has obtained EU CE certification.

We kept the original assumption unchanged and maintained the company's 2024-2026 forecast net profit of 0.037, 0.08, and 0.119 billion yuan respectively. Considering that the company is a leading domestic electrophysiological equipment and consumables company, that its products have core technical barriers, that its R&D progress is at the forefront of peer companies, and that it has sufficient long-term development potential, we adopted the DCF valuation method to give a target price of 26.58 yuan to maintain the “gain” rating.

Risk warning

Sales and product promotion fall short of expectations, product development progress falls short of expectations, risk that assumptions that fall short of expectations will be unfavorable to valuation, etc.