Brief performance review

The company released a report for the third quarter of 2024. In the first three quarters, it achieved operating income of 0.291 billion yuan, an increase of 23.21% over the previous year; realized net profit due to mother of 41.73 million yuan, an increase of 262.22% over the previous year; and realized net profit after deducting non-return to mother of -0.75 million yuan. Single Q3 achieved operating income of 92.5 million yuan, a year-on-year decrease of 1.54%; single Q3 realized net profit of 24.71 million yuan, an increase of 163.92% over the previous year; realized net profit of -1.67 million yuan after deduction.

Business analysis for the first three quarters of 24 years

The company maintained rapid development in the first three quarters, and its main business increased 26% year over year after excluding outsourced R&D revenue in 2023. As of the third quarter of 2024, the company's cumulative revenue reached 0.291 billion, up 23.2% year on year; excluding the previous year's outsourced R&D revenue, the main business revenue increased 26% year on year. In the third quarter of 2024, the company's revenue was 92.5 million yuan, a slight decrease compared to the second quarter. Overseas revenue increased by more than 20% year over year. This increase was mainly affected by the change of distributors in some regions of the country and delays in revenue confirmation for some overseas projects.

The company performed more than 3,000 pressure catheter surgeries in China in the first three quarters. In the third quarter of 2024, the number of 3D electrophysiological surgeries in the company exceeded 6,000, including about 5,000 in China and about 1,000 overseas. The company's overseas markets showed rapid growth in the first three quarters, and the year-on-year growth rate in the number of surgeries surpassed the domestic market. The use of pressure catheters showed a trend of increasing month by month. In the first three quarters, the number of domestic pressure catheter surgeries exceeded 3,000, while overseas surgeries exceeded 1,000. One-third of these surgeries were used to treat atrial fibrillation.

The company's existing products continue to expand market coverage, and the products under development are progressing smoothly. Pressure catheters and magnetic positioning ring pulmonary catheters have successfully obtained EU CE certification, and are currently actively promoting high-density labeling catheters to obtain the same certification before the end of the year. The registration process for the cryoablation series products is being accelerated, with a view to covering more complex and precise surgical scenarios in the future. The pressure pulse catheter independently developed by the company has completed the clinical enrollment stage and recently entered the National Drug Administration (NMPA) special review process for innovative medical devices. Furthermore, the PFA generation products developed by Shangyang Medical Institute, in which our company is a shareholder, are in the process of registration, and it is expected that they will successfully obtain an NMPA registration certificate in the first half of 2025.

Profit forecasting

We expect the revenue side of the company to be 0.421 billion yuan, 0.58 billion yuan and 770 million yuan respectively, with revenue growth rates of 27.9%, 37.8% and 32.8% respectively. Net profit to mother is expected to be 0.043 billion yuan, 0.07 billion yuan and 118 million yuan respectively from 2024 to 2026, and net profit to mother will grow 649.0%, 64.5% and 68.1%, respectively. The corresponding PE for 2024-2026 is 229.6, 139.6, and 83.1, respectively. We are optimistic about the company's future development prospects in the field of electrophysiology and maintain a “buy rating”.

Risk warning:

Policy uncertainties such as product development progress falling short of expectations, product market acceptance falling short of expectations, and volume procurement.