Core Viewpoint - The company reported its 1H25 performance, showing a revenue of 714 million yuan, a year-on-year decrease of 9.2%, but a quarter-on-quarter increase of 70.4%. The net profit attributable to shareholders was 315 million yuan, down 22.0% year-on-year, but up 219.2% quarter-on-quarter, aligning with expectations [1]. Financial Performance - 1H25 revenue was 714 million yuan, with a year-on-year decline of 9.2% and a quarter-on-quarter increase of 70.4% [1]. - The net profit attributable to shareholders was 315 million yuan, reflecting a year-on-year decrease of 22.0% and a quarter-on-quarter increase of 219.2% [1]. Business Development Trends - The aortic stent business showed significant stabilization, with 1H25 revenue of 514 million yuan. The company anticipates continued recovery in domestic aortic business due to the clearance of price reduction impacts and improved expectations regarding centralized procurement [2]. - Peripheral and other revenues reached 200 million yuan, maintaining a growth trend, with expectations of continued benefits from centralized procurement in the second half of 2025 and beyond [2]. - The company plans to distribute a cash dividend of 13.00 yuan per 10 shares, totaling 157 million yuan (including tax) [2]. International Expansion - 1H25 overseas sales revenue was 123 million yuan, a year-on-year increase of 95.22%, with the revenue share rising to 17.25%. The company has expanded sales to 45 countries, including regions in Europe, Latin America, Asia-Pacific, and Africa [3]. - Specific products have been implanted in multiple countries, including the Castor branched aortic stent in 27 countries and the Minos abdominal aortic stent in 27 countries [3]. R&D Pipeline Progress - In 1H25, the new generation Cratos branched aortic stent system was approved for market and clinical implantation. Other products are in various stages of regulatory review and clinical follow-up [4]. - The Hector multi-branch aortic stent system has entered the special review process by the National Medical Products Administration (NMPA) [4]. Profit Forecast and Valuation - The company maintains its 2025 net profit forecast at 646 million yuan and introduces a new forecast for 2026 at 755 million yuan, with corresponding P/E ratios of 21.4 and 18.3 times [5]. - The company maintains an outperform rating and a target price of 150 yuan, indicating a potential upside of 34% from the current stock price [5].

Investment Rating - The report initiates coverage with a "Buy" rating for the company [5][6]. Core Views - The impact of the aortic stent price adjustment is gradually diminishing, and the company maintains its long-term growth potential. The company is positioned in a high-growth segment of high-value consumables [5][6]. - The company has completed over half of its annual equity incentive targets, reflecting confidence in future growth [6][37]. - The company is expanding its product offerings, with new products expected to drive revenue growth in the peripheral intervention segment [10][20]. Company Overview - The company focuses on the research, production, sales, and service of aortic and peripheral vascular interventional medical devices. As of September 2024, its products are used in over 2,400 hospitals in China and have entered 40 countries, saving over 330,000 lives globally [4][20]. - The company has a total market capitalization of 138 billion yuan and a total share capital of 1.23 billion shares [3]. Financial Performance - The company expects revenues of 1.519 billion yuan, 1.894 billion yuan, and 2.331 billion yuan for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 26%, 25%, and 23% [5][12]. - The projected net profit attributable to the parent company for the same years is 617 million yuan, 737 million yuan, and 904 million yuan, with growth rates of 23%, 20%, and 23% [5][12]. - The company’s PE ratios for 2025, 2026, and 2027 are projected to be 22.27, 18.72, and 15.25, respectively [5][12]. Product Development - The company has launched new products, including the Cratos branched stent, which is expected to enhance market acceptance and replace older models [7][10]. - The company is set for a significant year in 2025 for the release of new peripheral products, which are anticipated to become a new growth engine [10][20]. Market Position - The company holds a leading position in the domestic market for aortic interventional products, with a market share of 29% as of 2021 [20]. - The company’s aortic intervention stent revenue has shown a compound annual growth rate (CAGR) of 39% from 2016 to 2023 [20][26].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a significant price increase in the next 6-12 months [4]. Core Insights - The company anticipates a revenue of 708 million to 787 million RMB for the first half of 2025, representing a year-on-year decline of 10% to flat growth. The net profit attributable to the parent company is expected to be between 304 million and 361 million RMB, reflecting a year-on-year decrease of 25% to 11% [2]. - The company has successfully launched several innovative products, including the Cratos branched aortic stent system and the Tipspear transjugular intrahepatic portosystemic shunt kit, which have received regulatory approval [3]. - The international business has expanded to over 40 countries, with significant certifications obtained for key products, indicating a strong international growth strategy [3]. Performance Analysis - The company experienced a temporary decline in performance due to price adjustments and market conditions in the domestic market, but core products have shown resilience and recovery in the second quarter [2]. - Revenue growth is projected to rebound significantly in the coming years, with expected net profits of 606 million, 794 million, and 965 million RMB for 2025, 2026, and 2027, respectively, indicating growth rates of 21%, 31%, and 22% [4][9]. Financial Projections - The company’s revenue is forecasted to grow from 1,206 million RMB in 2024 to 2,505 million RMB in 2027, with a compound annual growth rate (CAGR) of approximately 21.08% [9]. - The projected net profit margins are expected to improve, with net profit margins of 41.6% in 2024 and 38.5% in 2027 [10]. Market Sentiment - Recent market analysis shows a strong preference for "Buy" ratings, with a significant number of recommendations over the past months indicating positive sentiment towards the company's stock [11].