Investment Rating - The report initiates coverage with an "Outperform" rating for the company [4] Core Insights - Lepu Medical, as a leading player in the cardiovascular sector, is experiencing stable growth in traditional business while exploring new growth avenues in aesthetic medicine and innovative drugs, which are expected to significantly enhance profits in the next 1-5 years and beyond [1][4] - The company has a diverse product matrix and is focusing on innovative drug development, particularly in the cardiovascular and metabolic disease sectors, with promising clinical trials underway [4][21] - The aesthetic medicine segment is rapidly expanding, with several key products recently approved, indicating a strong potential for market growth [4][24] Financial Summary - Total revenue is projected to decline from 79.8 billion in 2023 to 61.03 billion in 2024, followed by a gradual recovery to 87.67 billion by 2027, reflecting a CAGR of 12.8% from 2025 to 2027 [3][5] - Net profit is expected to drop significantly from 1.258 billion in 2023 to 247 million in 2024, before rebounding to 1.506 billion by 2027, indicating a strong recovery trajectory [3][5] - Earnings per share (EPS) is forecasted to increase from 0.57 in 2025 to 0.80 in 2027, reflecting the company's improving profitability [4][5] Business Segments Cardiovascular Sector - Lepu Medical is a comprehensive solution provider for cardiovascular diseases, with a strong focus on innovation and a robust product pipeline, including several "firsts" in the domestic market [9][17] - The company has seen a stable return to profitability in its traditional business, with a slight decline in revenue in the first half of 2025, indicating resilience in a competitive market [4][9] Innovative Drug Development - The company is strategically positioned in the innovative drug sector through its subsidiary, Minwei Biotech, which focuses on cardiovascular and metabolic diseases, with several promising candidates in clinical trials [21][22] - Minwei Biotech's candidate drugs are leading in the domestic market, with significant advancements in clinical phases, particularly in obesity and type 2 diabetes treatments [22][23] Aesthetic Medicine - The aesthetic medicine segment is rapidly growing, with key products like the poly-L-lactic acid dermal filler and hyaluronic acid solutions receiving regulatory approval, indicating a strong market entry [24][25] - The company is actively expanding its non-insurance medical field, with high growth potential in the aesthetic sector [24]

Core Viewpoint - The approval of AcoArt Verbena® marks a significant breakthrough in the treatment of vertebral artery stenosis, ushering in a new era of "intervention without implantation" [2][4]. Group 1: "Intervention Without Implantation" Concept - The "intervention without implantation" concept aims to restore the health of blood vessels while avoiding the long-term issues associated with permanent implants, such as in-stent restenosis and chronic inflammation [4]. - This approach addresses the limitations of traditional metal stents, which can lead to complications over time [4]. Group 2: AcoArt Verbena® Overview - AcoArt Verbena® is the world's first drug-coated balloon (DCB) specifically designed for vertebral artery origin stenosis (VAOS), suitable for patients with ≥70% stenosis and ineffective drug therapy [9][10]. - The product utilizes advanced drug coating technology with magnesium stearate as a carrier for paclitaxel, enhancing drug stability and delivery efficiency [10]. Group 3: Clinical Trial Results - AcoArt Verbena® demonstrated a significant reduction in target lesion restenosis rates, with the trial group showing a 12-month restenosis rate of 13.04% compared to 37.31% in the control group, a decrease of 67% [16][13]. - The product avoids serious adverse events related to devices, mitigating risks associated with long-term metal stent implantation [16]. Group 4: Market Landscape and Competitive Position - The global peripheral DCB market was valued at 4.91 billion yuan in 2023, with a projected compound annual growth rate (CAGR) of 14.1%, reaching 12.28 billion yuan by 2030 [15]. - Xianruida holds an 86.9% market share in China's peripheral DCB market, indicating a strong competitive position [15]. - The collaboration with Boston Scientific is expected to enhance market penetration and revenue growth, with potential sales exceeding 1.2 billion yuan in the next three years [18][19]. Group 5: Company Background - Xianruida, founded in 2008 and listed on the Hong Kong Stock Exchange in 2021, focuses on innovative medical technologies in vascular intervention [20][21]. - The company has developed a diverse product pipeline, including several DCB products and other interventional devices, addressing unmet clinical needs across various medical fields [21].