HSBC Qianhai Securities Limited: HSBC Qianhai: APT Medical’s third-quarter PFA procedure volumes rise; earnings forecasts raised

What drove third-quarter growth?

APT Medical’s revenue rose 27.2% year on year and net profit rose 41.8% in the third quarter of 2026, both broadly in line with HSBC Qianhai’s expectations; profit grew faster than revenue.
Third-quarter revenue from what the report calls the “y business” rose 45% year on year. Volumes of products used in PFA procedures rose to 5000 sets during the quarter, providing important support for the business’s growth.

According to the company’s conference call, PFA penetration in the domestic market remains below 20%. HSBC Qianhai expects volume-based procurement of related consumables in 2027 to increase penetration, with APT Medical poised to gain share through its cost-effective product portfolio.
The bank forecasts a 31.5% compound annual revenue growth rate for the company’s y business from 2026 to 2028. However, price cuts under volume-based procurement will also squeeze margins: it has lowered its overall gross margin forecasts for 2027 and 2028 by 48 and 38 basis points, respectively, while expecting an improved revenue mix and economies of scale to partly offset the pressure. If price cuts exceed expectations, profits could face greater pressure.

HSBC Qianhai raised its revenue forecast for the y business while lowering its forecast for the peripheral vascular intervention business to reflect the latter’s leveling growth. The two adjustments offset each other, leaving the overall revenue forecast for 2026–2028 broadly unchanged.
The earnings upgrade mainly stems from expenses: the bank expects economies of scale and stronger cost controls to lower the expense ratio, and has therefore raised its net profit forecasts for 2026–2028 by 2%–4%, to approximately 1.061 billion yuan, 1.32 billion yuan and 1.66 billion yuan, respectively.
These forecasts are not materially above market consensus: HSBC Qianhai’s net profit forecasts for 2026–2028 are 1%, 2% and 3% below the Wind consensus, respectively.

HSBC Qianhai maintained its buy rating and raised its price target from 318 yuan to 338 yuan, implying upside of approximately 24% from the 30 October 2026 closing price of 272 yuan used in the report.
The bank believes the company’s forward 12-month price-to-earnings ratio is about one standard deviation below its historical average. It also sees the implementation of the renewal policy for the Fujian-led volume-based procurement of related consumables across 27 provinces as a potential share-price catalyst.