Zhongjin: The heart valve industry is showing a warming trend, and it is recommended to pay attention to CARDIOFLOW-B (02160) and others.

CICC released a research report stating that CARDIOFLOW-B affiliated enterprise 4C Medical completed a Series D financing (led by Boston Scientific Corporation), and there have been frequent valve asset transactions in China; the volume of valve surgeries in China is showing a good growth trend. Based on the optimistic view of the potential for valve growth, the pipeline for the subsequent process, as well as the overall recovery of the pharmaceutical sector in the Hong Kong stock market, the "outperform industry" rating for CARDIOFLOW-B (02160) and Peijia Medical (09996) is maintained, and the profit forecast for 2026 is introduced for the first time. The main points of CICC are as follows: Recent MNC investments in related valve assets in China 1) The innovative company 4C Medical, previously invested in by CARDIOFLOW-B, recently announced the completion of a $175 million Series D financing, led by Boston Scientific Corporation. 4C focuses on the transcatheter mitral valve replacement (TMVR) treatment field, with its core product AltaValve receiving the "Breakthrough Device" certification from the US FDA by 2024, and has initiated key clinical studies in Europe and the US. According to the official website of MicroPort Group, CARDIOFLOW-B has previously invested in multiple rounds in 4C Medical, becoming its largest shareholder, and has exclusive commercial rights for AltaValve in Mainland China, Hong Kong, Macau, and Taiwan. 2) Edwards Lifesciences Corporation acquired JC Medical (overseas subsidiary of China Jianshi Medical) and JenaValve (investment in China Peijia Medical and ownership of the core products' rights in Greater China region) in 2024. They obtained overseas rights for the aortic valve regurgitation products J-Valve and Trilogy. Recently, multinational enterprises have been investing frequently in Chinese assets, validating the research and development capabilities and business development acumen of Chinese companies. Good growth in domestic surgical volume; continuous improvement on the supply side According to data from Valve Center, China's TAVR surgical volume reached 17,232 units in 2024, maintaining rapid growth for two consecutive years. According to the official websites of the NMPA and various provincial medical insurance bureaus, since 2024, multiple manufacturers such as SCIENTECH, Beijing Balance Medical Technology Co., Ltd., and Nuomei Medical have obtained approval for the listing of their TAVR products. Several provinces, including Henan and Beijing, have added medical insurance coverage for TAVR surgeries. CICC believes that the entry of more manufacturers will facilitate the promotion of procedures and patient education; broader medical insurance coverage will help solve payment issues that have long plagued innovative procedures such as TAVR. Leading valve companies such as CARDIOFLOW-B and Peijia Medical have shown a clear trend of controlling costs and reducing losses since 2024. The valve industry is expected to maintain a good growth rate in the future and continue to achieve profit improvements. Recommendation to focus on valve-related companies Edwards Lifesciences Corporation (EW.US), Boston Scientific Corporation (BSX.US), Peijia Medical (09996), CARDIOFLOW-B (02160), SCIENTECH (02291). Other related targets include Beijing Balance Medical Technology Co., Ltd. (688198.SH). Risk factors Worsening competitive landscape, industry growth rate lower than expected, and unexpected price reductions in centralized procurement.