Solid revenue growth in 1H21, inline with market expectation. Venus reported 1H21 revenue of RMB239mn (+134.6% YoY), accounting for 40% of our full-year estimate. The strong revenue growth was mainly driven by 1) increased sales in TAVR products which may contribute over 95% of the total revenue, and 2) market penetration of TriGUARD3 in overseas market. We estimate approximately 1,900 TAVR sales volume in 1H21 and a steady ASP of around RMB125,000 per unit during the same period. We think the second- generation product, VenusA-Plus, which were sold at a higher price than VenusA, may account for around 20% of the total sales volume in 1H21.
Venus maintained its leading position in Chinese TAVR market with its distribution channel penetrated into more than 300 hospitals. We expect Venus to further expand its hospital coverage to 350 hospitals by this year end and to realize 4,200 TAVR sales volume in full-year of 2021.
Further expand product pipelines to RDN products. In Jun 2021, Venus announced to form a JV, namely Renaly, with Healium Medical, an Israeli company, to jointly develop renal artery denervation (RDN) products to treat uncontrolled or resistant hypertension. The prevalence of hypertension in China has exceeded 330mn, ranking the first in the world. Renaly’s Dual- Mode Ultrasound Technology (DMUT) Platform can realize non-contact continuous ablation treatment with real-time monitoring function, which significantly lifts the safety and clinical efficacy of ablation procedures. Venus has appointed Professor Martin B. Leon as the global PI for its RDN development. Professor Leon and his team have been serving as the PI for clinical trials of several innovative systems including Medtronic’s Symplicity Spyral Renal Denervation System and ReCor Medical’s Paradise Ultrasonic Denervation System.
Expect multiple catalysts in coming months. We expect the Company’s Leaflex (an aortic valve repair device) and Vitae (a preloaded dry valve TAVR product) to enter into FIM in 3Q21. We also expect VenusP-Valve (a TPVR product) to obtain CE approval in 2H21.
Maintain BUY. We maintain our earnings forecast unchanged and forecast total revenue to grow 117%/ 72%/ 52% YoY in FY21E/22E/23E. We maintain our DCF-based TP of HK$78.4 (WACC: 9.0%, terminal growth rate: 4.0%).