Xianjian Technology is a leading enterprise in interventional treatment of peripheral vascular diseases
Xianjian is a leader in the aortic intervention market. The number of stents implanted is in the top three in China. A number of major products will be launched one after another starting in 2021. The pipeline is expected to cover the entire aorta area, greatly enhance competitiveness, and is expected to penetrate the indications that previously only open surgery could be used. Peripheral intervention also has a layout. Both the stent and the medicine ball have entered the green channel of the device, and the domestic replacement process will gradually begin.
From 2010 to 2019, the total R&D expenses reached 549 million, and a total of 11 products entered the green channel. It is a cardiovascular interventional treatment platform company.
Structural core: The echelon of centripetal blockers has been perfected, and left atrial occluders are gradually replacing anticoagulants, and there has been steady growth at home and abroad. Using the current three generations of products to form an echelon to meet different market needs (HeartR sinking channel, Cera and CeraFlex updates), absorbable blockers and PFO blockers have all entered the green channel and are expected to be marketed around 2022-23.
Left atrial occluders are expected to replace the use of warfarin. The potential space is huge. With their technical performance and clinical advantages, they seize the share of Poco and Abbott in the global market.
R&D highlights: Next-generation aortic stents bring high growth, iron-based degradable materials usher in a harvest period
As aortic products such as intraoperative stents, iliac artery stents, next-generation abdominal stents, and arch stents are marketed one after another, the product structure has been greatly upgraded, driving performance into a period of high growth. The left atrial occluder and pacemaker will also be released quickly. Some preliminary data from the FIM clinical trial of iron-based absorbable coronary stents has been revealed. Stent degradation is good, showing good safety. Phase II clinical trials will begin at the end of this year. IBS Angel has submitted CE certification and has entered the domestic green channel. It is expected to be approved next year, and the iron-based technology platform will soon enter a harvest period.
Risk Reminder: Risk of the spread of the epidemic; R&D progress falls short of expectations; bid price cuts exceed expectations
Investment suggestions: Equipment dark horse, high consumption pearl, maintaining the “buy” rating and raising the profit forecast. The estimated net profit for 2020-2022 is 16/234/305 million (originally 135/2.06/2.96), and the current stock price corresponds to PE 78/53/41x. As a leading enterprise in the field of minimally invasive intervention, Xianjian is in a leading position in various segments, and has strategic assets with great potential, such as left ventricular blockages and iron-based stents. The company's reasonable valuation is HK$3.67-4.22. It has 12%-29% premium space from the current stock price, maintaining a “buy” rating.