VENUS MEDTECH(2500.HK):TOPLINE IN-LINE;FOCUSING MORE ON OVERSEAS OPPORTUNITIES BOOSTS R&D EXPENSES
VENUS MEDTECH(2500.HK):TOPLINE IN-LINE;FOCUSING MORE ON OVERSEAS OPPORTUNITIES BOOSTS R&D EXPENSES
Revenue was up 21.7% YoY to RMB256m, with total TAVR implants of 2,300, in line with BOCIe, while net loss widened to RMB351m in 1H23, mainly due to surging R&D expenses and selling expenses, partially offset by improved gross margin. Instead of involution with peers in China, Venus focuses more on overseas opportunities, and expects Pvalve to launch in the US and CardioValve to obtain CE mark in 2026.The management maintains its guidance of 5,000 implants in China, and saw limited impacts from ongoing anti-graft activities given improved implants MoM in August. Currently, Venus' market cap is lower than peers (HK$2.2bn vs. c.HK$4.9bn of Peijia and c.HK$4.4bn of CardioFlow). While fundamentally we see the company core business remains on track, we believe investors' sentiment was clouded by (i) corporate governance concern, (ii) increasing Opex, and (iii) losing market share to peers. Post results, we revised down our TP to HK$12, basically on higher selling and R&D expenses. Maintain BUY.
收入同比增長21.7％，至2.56億元人民幣，TAVR植入總量爲2300例，與BocIe持平，而淨虧損在23年上半年擴大至3.51億元人民幣，這主要是由於研發費用和銷售費用激增，但部分被毛利率的提高所抵消。Venus沒有與中國同行合作，而是更多地關注海外機會，並預計Pvalve將在美國推出，CardioValve將在2022年獲得CE標誌。管理層維持其在中國植入5,000例植入物的指導方針，鑑於8月份植入物環比有所改善，持續的反移植活動的影響有限。目前，Venus的市值低於同行（22億港元，Peijia的市值約爲49億港元，CardioFlow的市值約爲44億港元）。儘管從根本上講，我們認爲公司的核心業務仍步入正軌，但我們認爲，（i）公司治理擔憂、（ii）運營支出增加以及（iii）市場份額流失給同行，這給投資者的情緒蒙上了陰影。業績公佈後，我們將目標價下調至12港元，這主要是由於銷售和研發費用增加。維持買入。
Key Factors for Rating
評級的關鍵因素
In-line topline but widened loss due to surging R&D: Revenue was up 21.7% YoY to RMB256m, with RMB230m (+17% YoY) from TAVR and RMB25m (177% YoY or -21% HoH) from TPVR, respectively. Gross margin improved 0.5ppt YoY to 79%. Selling, admin and R&D expenses increased by 28%, 42% and 34%, YoY respectively, accounting for 62%, 30% and 115% of revenue.Net loss widened from RMB200m in 1H22 to RMB351m in 1H23. As of June 2023, Venus has c.RMB1.4bn cash. The management expects Venus to achieve breakeven in 2025.
收入不變，但由於研發激增，虧損擴大：收入同比增長21.7％，至2.56億元人民幣，其中TAVR的收入分別爲2.3億元人民幣（同比增長17％），TPVR分別爲2.3億元人民幣（同比增長177％或-21％）。毛利率同比增長0.5個百分點至79％。銷售、管理和研發費用分別同比增長28％、42％和34％，佔收入的62％、30％和115％。淨虧損從22年上半年的人民幣2億元擴大至23年上半年的人民幣3.51億元人民幣。截至2023年6月，Venus擁有約14億元人民幣的現金。管理層預計，Venus將在2025年實現盈虧平衡。
Updates on commercialisation in China: according to management, Venus has completed 2,300 implants in 1H23, and maintains its guidance of 5,000 implants. Ex-factory ASP slightly decreased from RMB105k in 2022 to RMB102k-103k in 1H23. Selling expenses ratio increased 3ppts YoY to 62% in 1H23. Meanwhile, patient allowance has significantly decreased from RMB20,000 in 2022 to RMB11,000 in 1H23, allowing TAVR business to realise 9%-10% commercialisation profits margin in China. The management expects the commercialisation profit margin to continue to improve in 2H23, thanks to (i) improved patient affordability (more medical insurance coverage and gradually decreasing terminal price resulting in less patients allowance); (ii) online-offline hybrid physician education model, and (iii) continuous gross margin improvement. The monthly implantation volume in July and August was around 350, and management sees improved implantation MoM in August.
中國商業化的最新情況：據管理層稱，Venus已在23年上半年完成了2300例植入物，並維持了5,000例植入物的指導方針。出廠每股價略有下降，從2022年的人民幣10.5萬元降至23年上半年的人民幣10.2萬-10.3萬元。銷售費用比率在23年上半年同比增長3個百分點至62％。同時，患者津貼已從2022年的2萬元人民幣大幅下降至23年上半年的1.1萬元人民幣，這使TAVR業務在中國實現了9％-10％的商業化利潤率。管理層預計，商業化利潤率將在23年下半年繼續提高，這要歸功於（i）患者負擔能力的提高（醫療保險覆蓋範圍擴大，終端價格逐漸降低，患者補貼減少）；（ii）線上線下混合醫生教育模式，以及（iii）毛利率持續提高。7月和8月的每月植入量約爲350例，管理層認爲8月份的植入量環比有所改善。
Valuation
估價
Post results, we fine tuned our 2023-25E revenue and expect Venus to hold 40% market share in China in 2023. We raised our GPM while increasing R&D expenses and selling expenses. Updated CNY/HKD FX rate to 1.12, and revised down TP to HK$12. Maintain BUY.
業績公佈後，我們對2023-25年度的收入進行了微調，預計Venus將在2023年在中國佔有40％的市場份額。我們提高了 GPM，同時增加了研發費用和銷售費用。人民幣兌港元匯率更新至1.12，目標價下調至12港元。維持買入。
Key Risks for Rating
評級的主要風險
(i) intensified competition; (ii)) slower-than-expected sales ramp-up of TAVR products and R&D progress on pipeline products.
(i) 競爭加劇；(ii) TAVR產品的銷售增長低於預期，而在研產品的研發進展也低於預期。
Overseas forays: in 1H23, revenue from overseas markets increased by 60% YoY, thanks to growth in implantation volume of TPVR (+80% HoH). The management shared that implants in Europe accounted for 77% of total implants in overseas markets. As of August 2023, Pvalve has been included in the reimbursement scope of some Western European countries, and was launched in 30+countries. In July 2023, Pvalve obtained approval from the FDA for IDE application, and the management expects to kick off the pivotal trial in the US in October-November and in Japan in YE23 or beginning of 2024, respectively, with a total of 60 patient enrolments to be completed by YE24 and obtaining approval in 2026. The management expects overseas markets to contribute US$10m of revenue in 2023, owing to the increasing implants in Europe.
海外進軍：23年上半年，來自海外市場的收入同比增長60％，這要歸功於TPVR植入量的增長（+80％HoH）。管理層表示，歐洲的植入物佔海外市場植入物總數的77％。截至2023年8月，Pvalve已被納入一些西歐國家的報銷範圍，並在30多個國家推出。2023年7月，Pvalve獲得了美國食品藥品管理局的IDE申請批准，管理層預計將分別於10月至11月在美國啓動這項關鍵試驗，並於23年或2024年初在日本啓動這項關鍵試驗，總共60名患者入組將在YE24之前完成，並於2026年獲得批准。管理層預計，由於歐洲植入物的增加，海外市場將在2023年貢獻1000萬美元的收入。
譯文內容由第三人軟體翻譯。