Haitong: PFA explores the new era of global intensive commercialization of electrophysiology.

Haitong released a research report stating that globally, electrophysiology has entered the era of PFA, and Boston Scientific has risen from obscurity to become a "industry star" in electrophysiology with its PFA products. The revenue of the electrophysiology sector in 24Q3 was $526 million, a year-on-year increase of 177%, accelerating growth. Its market share is rapidly catching up with Johnson & Johnson, with the stock price rising by 55% in 24 years, and the total market value reaching $131.6 billion. With domestic companies such as Jinjiang Electronics, Deno Electrophysiology, and APT Medical Inc. also obtaining NMPA approval for their PFA products, domestic electrophysiology companies are expected to continue catching up with foreign companies like Johnson & Johnson, bringing significant changes to the market structure and industry space. PFA is expected to continue to replace RF and cryoablation, with better safety and effectiveness Compared to the current clinical use of RF ablation and cryoablation, pulse field ablation (PFA) has tissue selectivity, high safety, fast ablation speed, and does not produce heat energy during the process, ensuring safety and effectiveness. Additionally, PFA requires a lower adherence of catheters to myocardial tissue and has a shorter learning curve for doctors. PFA is expected to continue to replace RF and cryoablation, and drive market expansion. PFA penetration rate is expected to exceed expectations, with a market space of hundreds of billions in China According to Boston Scientific, the global atrial fibrillation ablation market will reach $5 billion by 2023, with PFA accounting for less than 5% of AF ablation procedures. However, its market share is expected to reach 60% to 80% by 2028, with great potential in the first-line treatment of persistent AF. Based on our calculations, the future PFA procedure volume in China is 800,000 cases, with a market space of hundreds of billions. Domestic PFA systems better meet the preferences of domestic doctors and are expected to surpass foreign competitors Boston Scientific's single-Q3 electrophysiology revenue was only 15% of Johnson & Johnson's in 22, but rose to 41% in 24, rapidly catching up. China's leading electrophysiology manufacturers have built differentiation advantages from foreign manufacturers in areas such as non-general anesthesia, pressure sensing, and 3D mapping, closer to the clinical habits of domestic doctors. They are expected to surpass foreign competitors in the field of electrophysiology through PFA products. Recommendations: APT Medical Inc. (688617.SH), Shanghai Microport Ep Medtech (688351.SH), Jinjiang Electronics, Deno Electrophysiology. Risk warnings: Risk of intensified medical cost control, risk of product listing progress falling short of expectations, risk of lower-than-expected procedure volumes, risk of lower-than-expected product sales, risk of valuation fluctuations, etc.