PEIJIA MEDICAL(9996.HK)：2024 RESULTS IN LINE; NEW TAVR PRODUCTS EXPECTED TO BE APPROVED STARTING FROM LATE 2025-格隆汇

机构：中银国际
研究员：Sharon SHI/Dolores Tang

　　2024 results were in line with revenue up 40% YoY to RMB615m and net loss narrowed from RMB393m in 2023 to RMB228m. Neuro- interventional business turned profitable in 2024, delivering RMB52.1m in segment profit and the group achieved a commercial profit of RMB105.3m. Year 2025 is the transitional year when Peijia will focus on optimising operation costs and prepare for the launch of new products, as TaurusNXT (3rd-gen TAVR), TaurusTrio (AR) and GeminiOne (TMVr) are expected to be approved in early 2026, late 2025-early 2026 and 2026, respectively. Post results, we fine tuned our 2025-26 forecasts, rolled over our DCF model, and derived a TP of HK5.6 (WACC of 11.1% and terminal growth rate of 2.0%). We like Peijia for its execution ability and comprehensive pipeline in transcatheter heart valve systems that not only meets diverse market demands but also positions the company well to navigate potential VBP impacts on TAVR in the future.Maintain BUY.
　　Key Factors for Rating
　　2024 results in line: revenue grew 40% YoY to RMB615m in 2024, of which RMB260m (+40% YoY)/RMB356m (39% YoY) were from TAVR/neuro- interventional business, in line with prior operating data. In 2024, Peijia completed 3,400+ implants (+37% YoY)), securing ~ 25% domestic TF market share. Overall gross margin declined by 3ppts to 70.5%, with 79.7% (-6.0ppts YoY) of TAVR business and 63.7% (-1.4ppt YoY) of neuro-interventional business, mainly due to (i) operation of new manufactory plant and (ii) centralised procurement on neuro-interventional products. Improved operating leverage led to net loss narrowing. S&M, admin, and R&D expenses ratio decreased by 20ppts, 8ppts, 33ppts to 53%, 25%, 33%, respectively. Neuro- interventional business turned profitable in 2024, delivering RMB52.1m in segment profit; and the group achieved a commercial profit of RMB105.3m.
　　Overall, net loss narrowed from RMB393m in 2023 to RMB228m in 2024. Cash balance was RMB707.8m as of end-2024 with net operating cash outflow of RMB5.2m (vs.RMB630.9m in end-2023).
　　2025 guidance: The management highlighted that Peijia ranked second and first in 4Q24 and January 2025 in terms of TAVR implantation volume. The management expects an accelerating TAVR industry growth in 2025 (vs.14% YoY in 2024), and aims to obtain 25%-30% market share. Besides, the management targeted 20%-30% YoY growth for neuro-interventional business.
　　Overall, Peijia expects to achieve breakeven by 2026. GPO on TAVR is still in early stage of discussion, and Peijia believes it has well prepared for the GPO given its higher gross margin and its comprehensive TAVR products.
　　Pipeline updates: TaurusNXT (3rd-gen TAVR), TaurusTrio (AR) and GeminiOne (TMVr) are expected to be approved in early 2026, late 2025-early 2026 and 2026, respectively. For early-stage pipeline, TaurusWave completed FIM research (10 cases), and Robotic Assisted TAVR System will launch FIM trial in 1H25 and registration clinical trial in 2H25-26. To go abroad, MonarQ (TTVR) has received FDA IDE approval for its EFS and DCwire initiated FDA 510(k) submission process.
　　Key Risks for Rating
　　1) Intensified competition in valve market; 2) slower-than-expected ramp-up of TAVR products and R&D progress; 3) GPO risk on neuro-interventional product; 4) further price cut on TAVR products.
　　Valuation
　　Post results, we fine tuned our 2025-26 forecasts, rolled over our DCF model, and derived a TP of HK5.6 (WACC of 11.1% and terminal growth rate of 2.0%).