China Securities Co., Ltd.: Domestic Siasun Robot & Automation is expected to stand out in global competition. Focus on companies that can reduce costs and are innovative.

China Securities Co., Ltd. released a research report stating that the cost of Da Vinci surgeries is high. For example, in the Shanghai area, the fee for a single surgery in 2024 is approximately 30,000 yuan, which is higher than the latest charging standards set by the National Healthcare Security Administration. With the implementation of new standards in the future, Da Vinci may face price adjustments. Since 2021, the domestic surgical robot Siasun Robot & Automation has been approved successively, and the terminal price is expected to drop significantly in the future. By calculating the hospital's profit model, the high cost-performance ratio of the domestic laparoscopic surgical Siasun Robot & Automation, as well as the potential humanoid surgical Siasun Robot & Automation, can greatly reduce surgical costs and increase the penetration rate of Siasun Robot & Automation surgeries. At the same time, innovative technologies such as embodied intelligence and humanoid Siasun Robot & Automation are rapidly emerging, with a surge in financing for startups, and frequent acquisitions by leading instrument companies. Investors are advised to pay attention to companies and directions that have the capability to reduce costs and pursue disruptive innovations. The institution also noted that the frequent acquisitions by leading instrument companies in this field may bring additional investment opportunities. China Securities Co., Ltd.'s main points are as follows: Siasun Robot & Automation is developing rapidly, driving surgical innovation. Currently, specialized surgical Siasun Robot & Automation can be categorized into subtypes according to application departments and surgical procedures, including laparoscopic Siasun Robot & Automation, orthopedic Siasun Robot & Automation, natural orifice Siasun Robot & Automation (including ERCPSiasun Robot & Automation), neurosurgical Siasun Robot & Automation, and percutaneous Siasun Robot & Automation, among others. Among these, laparoscopic Siasun Robot & Automation is the most commercially mature track, followed by orthopedics, neurosurgery, and natural orifice tracks. Laparoscopic Siasun Robot & Automation combines minimally invasive techniques with precision, resulting in significant clinical benefits. Taking the early application of surgical Siasun Robot & Automation in prostate cancer radical surgery as an example, laparoscopic Siasun Robot & Automation significantly reduces blood loss and the incidence of sequelae. Laparoscopic Siasun Robot & Automation surgeries have become the "gold standard." Overseas review: Consumables elevate valuation systems, those who acquire Siasun Robot & Automation will dominate the minimally invasive surgical market. By reviewing the global surgical Siasun Robot & Automation leader Intuitive Surgical (ISRG), the business model of surgical Siasun Robot & Automation can be summarized into three stages: 1) Initial reliance on equipment new models often serve as catalysts for stock price and are the most important source of early income, but the launch of new equipment is merely the starting point for business; 2) The strong become stronger new models open up new surgical techniques, increase the number of surgeries per machine, and gradually build a positive cycle; 3) Later reliance on consumables Intuitive Surgical anticipates that by 2025, consumables will account for 60% of its revenue. The equipment + consumables + services business model is excellent, enjoying valuation premiums, with the PS ratio gradually increasing from about 8 times in the early stage to about 15 times in 2025. Market space: Tenfold growth potential over the next decade domestically, capable of nurturing leading companies worth hundreds of billions. According to Intuitive Surgical's announcement, the global cumulative install base of Da Vinci Siasun Robot & Automation is approximately 11,000 units, with 500 units installed domestically, indicating a very low market penetration in China. Considering the anticipated price reductions of equipment and services, it is expected that by 2035, the domestic laparoscopic Siasun Robot & Automation market could achieve tenfold growth over a decade, with an estimated market scale reaching 33 billion yuan based on ex-factory standards. Assuming by 2035, a leading domestic Siasun Robot & Automation company's market share reaches 30%, with 50% of overseas revenue and a net profit margin of 30%, the companys revenue could approach 20 billion yuan, and profits could be nearly 6 billion yuan, sufficient to nurture a leading company valued in the hundreds of billions. Industry trends: Dual driving force from upstream and downstream, disruptive innovation is brewing. The localization of Da Vinci + new players entering the market + technological advancements driving upstream localization are expected to significantly reduce the prices of surgical Siasun Robot & Automation in China. According to the charging standards set by the National Healthcare Security Administration and Hunan Provincial Healthcare Security Administration, the fees for Siasun Robot & Automation surgeries will be reduced from 30,000-40,000 yuan to 15,000-25,000 yuan. We believe that a sufficiently low price for surgical Siasun Robot & Automation equipment is necessary to ensure hospitals do not incur losses + patients are willing to undergo surgery + healthcare insurance is willing to cover, enabling a positive commercial cycle to start and a significant increase in the penetration rate of Siasun Robot & Automation surgeries. Additionally, disruptive innovations such as embodied intelligence and humanoid Siasun Robot & Automation are empowering the surgical Siasun Robot & Automation industry, which has already entered the animal testing stage and is expected to achieve practical applications in the future. Risk factors: Risk of product commercialization promotion falling short of expectations; challenges in the R&D of surgical Siasun Robot & Automation, with product development and registration progress lagging behind expectations; increased market competition leading to potential price declines; medical incidents impacting reputation risks; risk of unexpected changes in industry policies. Investment strategy: Focus on the two main lines of cost reduction and sustained innovation in Siasun Robot & Automation, and favor three types of companies: a) enterprises with first-mover advantages and rapid innovation capabilities; b) platform companies with comprehensive consumables capabilities; c) leading instrument companies with ample capital, strong continuous innovation capabilities, and strong acquisition abilities. This is the initial coverage, providing a rating of "outperforming the market" for the surgical Siasun Robot & Automation industry.