HAITONG INT'L: Initiated SCIENTECH (02291) with a "outperform" rating, target price of HKD 28.94.

Haitong International has released a research report stating that it is covering SCIENTECH (02291) for the first time, giving it a "outperform the market" rating, and predicting EPS for 2025-2027 to be 0.89/1.15/1.45 yuan. Taking into consideration the company's complete product layout and the good development of new business sectors in recent years, referring to PE and PB valuations, adopting a cautious approach, the company is given a target price of 26.62 yuan / 28.94 Hong Kong dollars. The report states that in H1 2025, the company achieved operating income of 330 million yuan, a year-on-year increase of 32.4%; and achieved a net profit attributable to shareholders of 182 million yuan, a year-on-year increase of 29.8%. The company is a leader in the domestic congenital heart disease interventional medical device industry. Its traditional business relies on biodegradable technology, steadily increasing profits, and opening up heart valve products as a second growth curve. The bank believes that these two businesses will significantly increase the company's profits in the next 1-5 years. The company is a practitioner of the concept of "intervention without implantation," and its biodegradable occluders are highly popular. The bank believes that the trend towards "degradability" in structural heart intervention occluders is inevitable, and SCIENTECH has successfully promoted the biodegradation of interventional medical devices for congenital heart disease. Biodegradable products reduce the occurrence of long-term complications, and have significant clinical advantages over metal occluders. The use of degradable occlusion procedures may lead global Innovative Medical Management to new heights. China's low penetration rate of heart valve interventional surgery and large market potential are expected to grow at a CAGR of 69.8% from 2021-2025. The company's ScienCrown transcatheter implanted aortic valve system, as the world's first short valve with balloon expansion advantages, has achieved sales revenue of over 40 million yuan within six months through a differentiated approach. The bank believes that as the commercialization process deepens, the sales growth of this product will further increase.