Lepu Medical(SZ:300003) Huafu Securities·2024-08-04 05:30Investment Rating - The report gives a "Buy" rating for Lepu Medical, marking its first coverage [4]. Core Views - Lepu Medical is positioned as a leader in cardiovascular devices, with a focus on innovation and overcoming negative factors, indicating a potential upward turning point for performance [2][9]. - The company has successfully navigated challenges such as drug procurement pressures and is expected to return to high growth in 2024, driven by a low revenue base and the introduction of innovative products [10][11]. Summary by Relevant Sections Company Overview - Lepu Medical, established in 1999 and listed in 2009, provides comprehensive solutions for cardiovascular disease management, including devices, pharmaceuticals, medical services, and health management [9]. - The company has achieved significant milestones in innovation, including the first domestic coronary drug-eluting stent and the first biodegradable occluder, leading the industry towards "intervention without implantation" [9]. Financial Performance - The company reported a revenue of 7.98 billion yuan in 2023, a decrease of 25% year-on-year, with a net profit of 1.26 billion yuan, down 43% [3][10]. - Revenue is projected to grow at a CAGR of 12.6% from 2023 to 2026, with net profit expected to grow at a CAGR of 28.6% during the same period [2][3]. Product Innovation and Pipeline - Lepu Medical has a robust pipeline of innovative products, with over a hundred products in various clinical stages, including the recently approved biodegradable PFO occluder and shockwave balloon [19][23]. - The company’s innovative product revenue has significantly increased, with coronary intervention products accounting for 69% of total revenue in the first half of 2022, up from 10% in 2019 [19][29]. Market Dynamics - The report highlights a reduction in systemic risks associated with drug procurement, with limited price reductions for key products in the upcoming Guangdong procurement [10][11]. - The company is also expanding its international presence, having established sales networks in over 160 countries and regions, with a focus on Southeast Asia [19][22]. Investment Recommendations - The report suggests that Lepu Medical's innovative devices and the stabilization of its pharmaceutical segment will support steady growth, justifying the "Buy" rating [2][4]. - The average PE for comparable companies is estimated at 33 times for 2024, indicating potential upside for Lepu Medical's stock [2][4].