\u3000\u3 Guocheng Mining Co.Ltd(000688) 016 Shanghai Microport Endovascular Medtech (Group) Co.Ltd(688016) )
Report summary
Shanghai Microport Endovascular Medtech (Group) Co.Ltd(688016) is the industry leader of aortic intervention in China. The company was separated from minimally invasive medicine in 2012 and is mainly engaged in the R & D, production and sales of medical devices for aortic and peripheral vascular intervention. The company attaches great importance to technological innovation, and the proportion of R & D investment is significantly higher than the average level of comparable A-share listed companies. Through continuous R & D accumulation, the company launched differentiated products and achieved rapid growth with the rapid iteration of innovative products. In 2021, the company achieved an operating revenue of 685 million yuan, a year-on-year increase of 40.91%, and the compound growth rate of revenue from 2016 to 2021 was as high as 41%. From January to February 2022, the company achieved an operating revenue of about 187 million, and still achieved a good growth rate of about 35% under the negative disturbance of covid-19 epidemic.
Aortic interventional stent has great development potential. China is in the early stage of the industry with low market penetration. The company is expected to continue to expand its market share with differentiated innovation. Aortic intervention is the preferred option for the treatment of aortic lesions. Aortic intervention in China is in its early stage. The penetration rate of endovascular therapy in the United States was 3.1% in 2018, while that in China was only 1.6%. Compared with that, there is still much room for improvement. We expect that the market scale of aortic intervention in China will be about 2.5 billion yuan in 2022, will exceed 4.6 billion yuan in 2027, and the five-year compound growth rate will be about 12.94%. The aortic intervention industry has a history of more than 30 years, but it still has great potential for development. Many clinical applications such as ascending main, arch and complex abdominal main lesions have not been met. Especially under the trend of minimally invasive clinical surgery, there are still many application scenarios to be expanded. At present, the core competitive factors of the industry lie in product performance and clinical treatment effect; The company has devoted itself to research in the aortic field and gradually moved from following imitation to leading innovation. Compared with similar products, the company has fast iteration speed, high R & D efficiency and better clinical performance. It has successively launched the world’s first branched thoracic aortic stent castor and the first microporous thoracic aortic stent t alos, realizing breakthrough innovation in interventional therapy in the thoracic aorta and other fields. At present, the company’s market share in China is about 26%, second only to Medtronic. In the future, it is expected to continuously improve its core competitiveness and further expand its market share with a steady stream of innovative products.
The peripheral intervention market is broader and is in the expansion period of horse racing enclosure. The company is expected to replicate the aortic path and develop rapidly. 1. From the perspective of the industry, the ceiling of peripheral intervention growth is higher and the growth rate of the industry is faster. Peripheral vascular diseases are complex and diverse, and the market space is more considerable. The market scale of China in 2022 is about 7.12 billion yuan. It is expected that the Chinese market is expected to reach 30 billion yuan by 2030, with a compound growth rate of 19.7%. China’s peripheral intervention in the market started late and is currently in a period of rapid expansion. The layout of foreign brand products is complete and monopolizes most of the market; Among them, domestic and imported products in the field of lower extremity arteries basically stand on the same starting line. We believe that channel sales and hospital promotion ability are the core competitive elements of the market. 2. From the perspective of the company, Shanghai Microport Endovascular Medtech (Group) Co.Ltd(688016) channel has more significant advantages, with excellent performance of existing products, abundant reserves under research and strong growth momentum Shanghai Microport Endovascular Medtech (Group) Co.Ltd(688016) ‘s peripheral drug balloon products were successfully approved in China in 2020, taking the lead in the field of lower limb arteries; Compared with competitors, the company has performance advantages in core indicators such as lumen loss rate, and is expected to enter the hospital quickly and continuously expand market share with the help of a strong sales network. At the same time, the company has rich research echelons, covering peripheral arteries, peripheral veins, tumor intervention and other fields. Relevant products have significant competitive advantages in structural design, surface modification, process treatment and other aspects, and the technical level is leading in the industry. It is expected that the peripheral intervention products of the company are expected to be approved intensively from 2023 to 2025, providing sufficient impetus for the medium and long-term development of the company.
Profit forecast and investment suggestions: we estimate that the company’s revenue from 2022 to 2024 will be 944 million, 1280 million and 1693 million yuan, with a year-on-year increase of 38%, 36% and 32%, and the net profit attributable to the parent company will be 419 million, 576 million and 758 million yuan, with a year-on-year increase of 33%, 37% and 32%, corresponding to EPS of 5.82, 8.00 and 10.53. At present, the company’s share price corresponds to 36 times PE in 2022. Considering that the company is a leading enterprise in China’s vascular intervention and has significant competitive advantages, it is expected to maintain a high growth trend in the future with a series of aorta and peripheral intervention innovative products. Combined with the valuation analysis of comparable companies, we believe that the reasonable valuation range of the company is 40-50 times PE in 2022, which is covered for the first time and given a “buy” rating.
Risk tips: the risk of new product research and development, the risk of intensified market competition, the risk of lower than expected sales growth, the risk of deviation in market space measurement, and the risk of delayed information or untimely update of the public data used in the research report.
