The Zhitong Finance App learned that Southwest Securities released a research report saying that PCI surgery is the main treatment for coronary heart disease, but the domestic PCI penetration rate is still at a low level. In 2019, the number of PCI surgeries per million people in the US, Japan, Europe and China was 2,951, 2276, 2222, and 729, respectively, and there is still room for at least 3 times the amount of PCI surgeries in China. With the reduction in the cost of surgery and the improvement in the safety and effectiveness of interventional consumables brought about by collection, and the increase in residents' willingness and ability to pay for PCI surgery, there is still plenty of room for penetration in China's coronary artery disease interventional treatment market.

Related targets: Sano Healthcare (688108.SH), Minimally Invasive Medicine (00853), Lepu Healthcare (300003.SZ), Lanfan Healthcare (002382.SZ), Xinlitai (002294.SZ), Xianjian Technology (01302), etc.

The views of Southwest Securities are as follows:

Coronary heart disease is the leading cause of death in the world, and there is still plenty of room for penetration in the interventional treatment market for coronary artery disease in China.

Coronary artery disease is a heart disease caused by coronary atherosclerosis that narrows or obstructs the lumen, leading to myocardial ischemia, lack of oxygen, or necrosis. In 2020, the number of people with coronary heart disease in China reached about 11 million. The death rate of urban residents was 127/100,000, and the death rate was 136/100,000 in rural areas. The prevalence rate and death rate are on the rise. Compared to the inflection point of 300/100,000 people in the US in 1975, China's coronary heart disease prevalence rate has not reached its peak. The troika of coronary artery disease treatment is medication, percutaneous coronary intervention (PCI), and coronary artery bypass grafting (CABG). Patients with coronary stenosis > 50% are generally diagnosed with coronary artery disease. PCI surgery is the main treatment for coronary heart disease, but the domestic PCI penetration rate is still at a low level. In 2019, the number of PCI surgeries per million people in the US, Japan, Europe, and China was 2,951, 2276, 2222, and 729, respectively. There is still room for at least 3 times the amount of PCI surgeries in China. With the reduction in the cost of surgery and the improvement in the safety and effectiveness of interventional consumables brought about by collection, and the increase in residents' willingness and ability to pay for PCI surgery, there is still plenty of room for penetration in China's coronary artery disease interventional treatment market.

After full collection, coronary stents and dilated balloons entered the “100 yuan era”, and drug balloons entered the “1,000 yuan era”.

The three high-value consumables for PCI interventional treatment: drug-eluting stents, stent expansion balloons, and drug-coated balloon collection have basically achieved nationwide coverage, and procurement prices are low. Among them, drug-eluting stents were reduced from 13,000 yuan to 800 yuan, dilation balloons were reduced from 3,000 yuan to 300 yuan, and drug balloons were reduced from 20,000 yuan to 6,300 yuan. After collection, the domestic coronary intervention market is estimated to be 6.4 billion yuan in 2023. The penetration rate of high-value new products such as degradable stents and drug balloons is expected to continue to increase in the future, and the coronary interventional treatment market is expected to reach 16.7 billion yuan in 2030.

Facing the huge development space in the cardiovascular intervention market and the new situation after mass procurement, there are three main key points for coronary intervention companies to break the game:

1) Lay out a “no implantation” product line. Implant-free products (drug balloons, degradable stents) can expand narrowed blood vessels without leaving permanent implants, providing patients with a wider range of treatment options, and have obvious advantages in safety and patient acceptance. Currently, the market for implant-free products is relatively small. The decline in pharmaceutical ball collection is relatively moderate. Degradable stents have not yet been included in collection, and are expected to become the mainstream of next generation intervention. Relevant targets include: drug balloons (Lepu, Yuanda, Blue Sail) and degradable stents (Lepu, Minimally Invasive, Xianjian, Weigao).

2) Find the “two low” race tracks for coronary intervention. Low penetration rate: Complex lesions such as calcification and thrombus treatment of coronary heart disease are still pain points in coronary surgery. Innovative products are expected to provide novel treatments for coronary heart disease, such as intravascular shock wave systems (Lepu, Minimally Invasive, Pegia, Blue Sail) and modified balloons (Lepu, Sano, Minimally Invasive, Yingtai). Low localization rate: Coronary auxiliary pathway products such as guide wires and catheters are still dominated by foreign brands. The localization rate in 2019 was less than 20%. Collection will help domestic manufacturers increase their market share. Relevant targets include Yingtai, Lepu, Huitai, and Yeju.

3) Go overseas to find new opportunities. With the implementation of volume procurement, domestic coronary intervention products are facing drastic price cuts. Domestic manufacturers are turning to overseas businesses seeking more stable profits to find new opportunities for globalization. Manufacturers with leading overseas layouts include Sano, Minimalist, Blue Sail, and Lepu.

Risk warning: the risk of price reduction in renewal, the risk of falling short of expectations when going overseas, the risk that the progress of new product development falls short of expectations, and the risk of worsening market competition.