PEIJIA MEDICAL(9996.HK):SIGNIFICANT LOST REDUCTION ON IMPROVED OPERATING EFFICIENCY
PEIJIA MEDICAL(9996.HK):SIGNIFICANT LOST REDUCTION ON IMPROVED OPERATING EFFICIENCY
Updates on TAVR business: Peijia completed c.1,750 TAVR implants, indicating a growth of c.40% YoY vs. c.20% in the industry. The outpaced growth increased Peijia's market share in China's transfemoral TAVR market to c.25%. Patient allowance decreased to c.RMB10,000/implant. The number of covered hospitals increased by 93 to 582, while the number of salesforces decreased by 2 to 198. With the improved output per salesperson, S&M expenses of TAVR business declined by 14% YoY in 1H24. The management does not expect substantial increase in S&M expenses in the short term despite TauruMax being launched in August 2024 and TaurusNXT (dry-tissue TAVR) to be launched in YE25/26. As the patient enrolments of the three registered clinical trials (TaurusTrio (AR), TaurusNXT, and GeminiOne (TMVr)) were completed in the first half of 2024, subsequent R&D expenses ratios are expected to gradually decrease. The management expects accelerating implantation in 2H24 compared to 1H24.Revenue grew 34% YoY to RMB301m in 1H24, of which RMB130m (+21% YoY) and RMB171m (+46% YoY) were from TAVR and neuro- interventional business, respectively, in line with the operating data released in July. Net loss narrowed from RMB212m in 1H23 to RMB71m in 1H24, beating our estimation. The management reiterated its guidance of (i) 23%-27% of TAVR market shares, (ii) 30%- 40% YoY growth in neuro-interventional business, (iii) significant loss reduction in 2025, and (iv) breakeven in 2026. Peijia's comprehensive portfolio layout helps meet different patient demands and will enhance its competitive edges from 2025 onwards. Maintain TP of HK$4.2 and BUY rating.
營業收入同比增長34%，從1H23的2.1億元人民幣增長到1H24的3.01億元人民幣，其中通過TAVR和神經介入業務分別爲1.3億元人民幣（同比增長21%）和1.71億元人民幣（同比增長46%），與7月份發佈的運營數據一致。淨虧損從1H23的2.12億元人民幣減少到1H24的7100萬元人民幣，超出我們的預期。管理層重申了公司的指導方針：（一）在TAVR市場上佔有23%-27%的份額，（二）神經介入業務年同比增長30%-40%，（三）在2025年大幅減少虧損，（四）在2026年達到盈虧平衡。沛嘉綜合產品佈局有助於滿足不同患者需求，並將從2025年開始提升其競爭優勢。維持港元4.2元的目標價和買入評級。
Key Factors for Rating
評級的關鍵因素
Net loss significantly narrowed to RMB71m in 1H24, beating our expectation: revenue grew 34% YoY to RMB301m in 1H24, of which RMB130m (+21% YoY)/RMB171m (46% YoY) were from TAVR/neuro-interventional business, in line with the operating data released on 25 July. Overall gross margin declined by 4ppts to 73%, with 82% (-5ppts YoY) in TAVR and 66% (-2ppts YoY) in neuro-interventional products, mainly due to (i) price cut on TAVR products, (ii) GPO on neuro-interventional products. Improved operating efficiency led to significant net loss narrowing. S&M, administrative, and R&D expenses ratio decreased by 26ppts, 7ppts, 43ppts to 50%, 21%, 33%, respectively. By segment, neuro-interventional realised operating profits of RMB29m, exceeding management's guidance of RMB10-20m profits in 2024, and commercialisation- wise profits of TAVR were also close to breakeven for TAVR business (-RMB2.5m). Overall, net loss narrowed from RMB212m in 1H23 to RMB71m in 1H24, beating our estimation. The management reiterated its guidance of (i) 23%-27% of TAVR market share, (ii) 30%-40% YoY growth in neuro-interventional business, (iii) significant loss reduction in 2025, and (iv) breakeven in 2026. As of 30 June 2024, Peijia has cash of RMB831, and operating cash outflow decreased from RMB470.3m in 1H23 to RMB41.4m in 1H24 and the remaining milestone payment for BD projects was less than RMB290m.
淨虧損在1H24大幅減少到7100萬元人民幣，超出我們的預期：營業收入同比增長34%，從1H23的2.12億元人民幣增長到1H24的3.01億元人民幣，其中通過TAVR和神經介入業務分別爲1.3億元人民幣（同比增長21%）和1.71億元人民幣（同比增長46%），與7月25日發佈的運營數據一致。總毛利率下降了4個百分點至73%，其中TAVR爲82%（同比下降5個百分點），神經介入產品爲66%（同比下降2個百分點），主要原因是（一）TAVR產品價格下降，（二）神經介入產品採取政府採購組織（GPO）。改善的運營效率導致淨虧損顯著減少。銷售管理、行政和研發費用比例分別下降了26個百分點、7個百分點和43個百分點，分別爲50%、21%和33%。按業務劃分，神經介入實現了2900萬元人民幣的營業利潤，超出了管理層對2024年盈利1000-2000萬元人民幣的指導，而TAVR業務的商業化利潤也接近盈虧平衡（-250萬元人民幣）。總體上，淨虧損從1H23的2.12億元人民幣減少到1H24的7100萬元人民幣，超出我們的預期。管理層重申了公司的指導方針：（一）在TAVR市場上佔有23%-27%的份額，（二）神經介入業務年同比增長30%-40%，（三）在2025年大幅減少虧損，（四）在2026年達到盈虧平衡。截至2024年6月30日，沛嘉現金流爲8.31億元人民幣，運營現金流出從1H23的4.7億元人民幣減少到1H24的4140萬元人民幣，而公司BD項目的剩餘里程碑付款少於2.9億元人民幣。
Updates on TAVR business: Peijia completed c.1,750 TAVR implants, indicating a growth of c.40% YoY vs. c.20% in the industry. The outpaced growth increased Peijia's market share in China's transfemoral TAVR market to c.25%. Patient allowance decreased to c.RMB10,000/implant. The number of covered hospitals increased by 93 to 582, while the number of salesforces decreased by 2 to 198. With the improved output per salesperson, S&M expenses of TAVR business declined by 14% YoY in 1H24. The management does not expect substantial increase in S&M expenses in the short term despite TauruMax being launched in August 2024 and TaurusNXT (dry-tissue TAVR) to be launched in YE25/26. As the patient enrolments of the three registered clinical trials (TaurusTrio (AR), TaurusNXT, and GeminiOne (TMVr)) were completed in the first half of 2024, subsequent R&D expenses ratios are expected to gradually decrease. The management expects accelerating implantation in 2H24 compared to 1H24.
關於TAVR業務的更新：培甲完成約1,750例TAVR植入手術，同比增長約40%，行業增速約爲20%。這種超過行業增長的增速將培甲在中國經皮經股動脈瓣膜置換（transfemoral TAVR）市場上的市場份額增加至約25%。患者津貼下降至每個植入手術人民幣10,000元。覆蓋醫院數量增加93家，達到582家，而銷售人員數量減少2人，達到198人。由於每名銷售人員的產出提高，TAVR業務的銷售與推廣費用同比下降14%。儘管TauruMax將於2024年8月推出，TaurusNXt（幹組織TAVR）將於2025/2026年年末推出，但管理層預計短期內銷售與推廣費用不會有大幅增加。由於TaurusTrio（主動脈瓣反流）、TaurusNXt和GeminiOne（二尖瓣（TMVr））的三個已註冊臨床試驗的患者招募已於2024年上半年完成，預計隨後的研發費用比例將逐漸降低。管理層預計2H24植入量將超過1H24。
Key Risks for Rating
評級的主要風險
1) Intensified competition in valve market; 2) slower-than-expected ramp-up of TAVR products and R&D progress; 3) GPO risk on neuro-interventional product; 4) further price cut on TAVR products.
1）瓣膜市場競爭加劇；2）TAVR產品和研發進展低於預期；3）神經介入產品的GPO風險；4）TAVR產品進一步降價。
Valuation
估值
Peijia showcased its executive ability and comprehensive pipeline layout in transcatheter heart valve systems. Its TAVR portfolio with price stratification not only meets different demands but also could deal with potential GPO on TAVR in the future. Post results, we edged up 2024-26E topline forecasts by 2%-3%. Considering its improved operating efficiency in 1H24, we narrowed our 2024 net loss forecast by 40%. We lowered long-term gross margin for TAVR to reflect the potential impact from centralised procurement. Maintain TP of HK$4.2 (WACC: 11.1%, terminal growth: 2.0%) and BUY rating.
培甲展示了其在經皮經血管瓣膜系統方面的執行能力和全面的產品線佈局。其具有價格分層的TAVR產品組合不僅滿足不同需求，還能應對未來TAVR的潛在GPO（集中採購）風險。發佈結果後，我們將2024-2026年的銷售預測上調2%-3%。考慮到其在1H24期間的提高運營效率，我們將2024年的淨虧損預測下調40%。我們降低了TAVR的長期毛利率，以反映集中採購可能對其帶來的影響。維持港元4.2元的目標價（WACC：11.1%，終端增長率：2.0%）和買入評級。
譯文內容由第三人軟體翻譯。
