瑞信-美股-医疗保健行业-牙医调查显示：牙科需求保持稳定-2019.4.17-42页.pdf

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.17 April 2019 Americas/United States Equity Research Life Science Tools and Diagnostics Dental Update Research Analysts Erin Wilson Wright 212 538 4080 erin.wrightcredit- Charles Lederer,CPA 212 538 1822 charles.lederercredit- Katie Tryhane 212 325 2713 katie.tryhanecredit- George Engroff 212 325 2289 george.engroffcredit- CHANNEL CHECK Survey Says:Dental Demand Holds Steady 1Q Dental practice volume,revenue growth on par with 4Q trend:According to our proprietary survey of 75 US dental practitioners,52%of practices experienced positive revenue growth in 1Q,rising 0.7%(weighted avg.),a slight improvement with our 4Q survey(+0.5%).Pricing(+0.9%)was the most meaningful driver of practice revenues,followed by new patient traffic(+0.7%),bridges/implants(+0.6%),and orthodontics(+0.5%).Respondents remain optimistic on NTM trends with 65%expecting improving practice volume(vs.71%in 4Q).While the trends indicate no meaningful turnaround in dental demand,we are modestly encouraged by the stability,providing a barometer for performance across our dental coverage universe.As a caveat,this is our third quarterly survey,and we expect increasingly relevant takeaways with greater historical context.EquipmentDigital dentistry drivers in innovation:While respondents were upbeat on equipment purchasing over the NTM,with particular focus on intraoral scanners,we note that practitioners may remain wary of larger cash outlays in light of macro concerns as well as noted reimbursement pressures.While it may be too early,in terms of new product launches,Dentsply Sironas(XRAY)Primescan offering is experiencing modest traction,where 4%currently own the offering and 6%plan to purchase Primescan in NTM(1%CAD/CAM,5%DI-only),while many(38%)remain unaware of the launch and others noting price as a key deterrent.That said,with seemingly more meaningful innovation materializing(e.g.Primescan),we maintain our positive thesis on XRAY amidst a longer term turnaround story.For Align Technology(ALGN),we were similarly encouraged by early feedback on its new iTero Element 5D,where 12%of respondents are expecting to purchase the offering NT,and traction for its broader iTero offering remains strong,potentially driven by higher promotional activity,where respondents noted more aggressive pricing across the iTero platform.Clear aligners remain in focusAlign dominates:The majority(61%)of clear aligner users expect demand to rise over the NTM,largely driven by marketing efforts from major companies,with volume also supported by a rising base of trained practitioners.Aligns Invisalign remains the market leader,with 57%of our entire cohort(83%of clear aligner users)offering Invisalign,including 93%of Invisalign users offering its more comprehensive Invisalign Full.While concerns over competition,DTC concepts,and ASPs will remain overhangs,we view there is room for several players in a highly underpenetrated clear aligner market.ALGN is well ahead in terms of innovation,and we await further traction in more recently launched products(e.g.Mandibular Advancement,Invisalign First,and Invisalign Go).While we are making no changes to our EPS estimates for ALGN,our TP moves to$305(from$278)on the latest encouraging survey data,offering greater conviction in NT earnings forecasts.17 April 2019 Dental Update 2 Supply chain,Direct Dist.,Amazon update:Henry Schein(HSIC,Neutral)and Patterson Companies(PDCO,Outperform)were named as primary distributors by 37%and 19%of respondents,respectively.The vast majority(79%)is satisfied with its primary distributor,and 91%do not work with GPOs,an unsurprising dynamic(differs from the Animal Health market).While only 10%of standard medical consumables(e.g.gloves,cotton balls)are purchased through Amazon today,respondents expect purchases through Amazon could grow to 19%in 3-5 years.In terms of direct distribution,respondents currently purchase only 8%of consumables(9%of equipment)direct from manufacturers,with 13%expecting to purchase more directly over NTM,a trend that may continue as dental manufacturers further invest in their internal sales efforts(e.g.Dentsply Sirona,Danaher).17 April 2019 Dental Update 3 Dental Survey Takeaways We commissioned a survey of 75 practicing dentists dispersed across 20 states in the U.S.,with the highest number of responses in New York(14),California(10),Florida(8),and Pennsylvania(6).Our respondents range across a number of specialties including general dentist(54),orthodontist(12),periodontist(6),pedodontist(2),and oral and maxillofacial surgeon(1),with an average tenure of 24 years.About half of our respondents work as sole practitioners(37),while most other participants work with multiple other dentists at a single practice owned by dentists(26).Of note,5 respondents work for a DSO or dental management organization affiliated group practices.On average,our respondents see 108 patients on a weekly basis.1Q Snapshot:Relevant company-specific highlights Dentsply Sirona(XRAY,Outperform)Earnings Date 5/3:We are forecasting 1Q19 revenues to fall 2.3%,driven by 2.5%organic consumables growth and+0.3%organic growth in Equipment,reflecting a y/y benefit from$8 million of destocking in 1Q18,partially offset by a 2.5%FX headwind.We remain optimistic on XRAYs salesforce execution push,where 16%of respondents currently purchase consumables directly from the company,with 13%expecting to purchase more directly from manufacturers over the next twelve months.With its February 2019 launch of Primescan,we view XRAYs recently revised strategy,where it has foregone its longstanding approach to solely promote more comprehensive,closed-architecture chairside CAD/CAM systems,now offering standalone digital impression systems,better addresses broader market demand trends.While only 8%of respondents plan to purchase the product NT(37%remain unaware of the product),we acknowledge it is still early days since its February launch.Importantly,while most of our respondents view XRAYs equipment pricing as unchanged,net-net our cohort views pricing is slightly less aggressive,following year-end and conference related discounts.Focus on its earnings call will be on end-market fundamentals,equipment trends,salesforce dynamics,and efficiency initiatives.Of note,the timing of the IDS show(March 2019)likely impacted 1Q end-market demand as practices await new equipment launches depending on the timing of distributor stocking dynamics.Danaher(DHR,Outperform)Earnings Date 4/18:Danaher posted its strongest organic growth metric since 3Q16 in 4Q(+2.5%),with management pointing to signs of end-market stabilizing,particularly in North America traditional consumables and equipment.In 1Q,we expect dental growth to rise 1.2%(organic),supported by positive sellout data in 4Q and an easy comp.Moreover,we view DHRs business will continue to experience healthier growth in a potentially strengthening demand environment,as indicated by our survey results(+1.6%NTM practice revenue growth)and as it invests in key business lines,including the upcoming Kavo X Pro product launch,where one respondent has already noted its interest in the offering.That said,respondents also noted more aggressive pricing strategies at Kavo,potentially as it aims to spur demand and share gains ahead of the DentalCo divestiture.As a reminder,DHR announced the structure of its DentalCo divestiture will now change from a spin to an IPO following the GE BioPharma deal to help optimize RemainCos capital structure post-transaction(see DHR:Dissecting the GE BioPharma deal).Distributors Patterson Companies(PDCO,Outperform),Henry Schein(HSIC,Neutral):On balance,while expectations for distributors remain relatively low,we are cautiously optimistic on prospects for the respective dental businesses of Patterson Companies and Henry Schein based on the incrementally positive NTM outlook on dental demand trends amongst our cohort.We also highlight positive commentary as it relates to Patterson,where respondents who utilize it as a primary distributor are more 17 April 2019 Dental Update 4 satisfied with the salesforce knowledge,on average,than competitors.Moreover,Amazons penetration remains low,only currently accounting for 7%and 5%of dental-specific consumables products and equipment,respectively.As a caveat,direct purchasing from manufacturers will also be a dynamic that we will monitor going forward in our survey work,though we acknowledge these purchases are relatively low currently,accounting for only 8%and 9%of consumables and equipment,respectively.Align Technology(ALGN,Outperform)Earnings Date 4/24:While news of several new entrants into the clear aligner space has pressured ALGNs shares along with recent pricing degradation that is expected to persist into 2019,we deemphasize the competitive threat,with a view that the highly underpenetrated clear aligner market is large enough for several players.Currently,ALGN represents 83%of the clear aligner market,where our cohort of dentists expects demand to grow+2.4%over the next twelve months,with volume growth likely incrementally supported by a growing base of trained dental professionals.We also note encouraging initial feedback for ALGNs iTero Element 5D,which was launched only recently outside the US.Of note,practitioners characterized pricing across ALGN equipment(iTero)as relatively more aggressive in the most recent quarter,a dynamic that can help to drive Invisalign sales longer term.All in,we forecast-28.9%EPS growth fueled by+21.8%topline growth,on+19.3%clear aligner growth and+40.0%iTero growth,offset by 540 bps EBITDA margin contraction in 1Q on incremental sales force,litigation expenses.Investor focus will be on 2019 commentary and quarterly guidance,with the market looking for evidence of continuing robust volume growth to offset aforementioned ASP pressure,which we view as well documented.While we are making no changes to our EPS estimates,our TP moves to$305(from$278)on the latest encouraging survey data,offering greater conviction in NT earnings growth.Of note,our estimates do not include incremental costs related to the SDC arbitration agreement,whereby ALGN will close its current Invisalign stores($26-$31 million),as well as a potential loss on the sale of its SmileDirectClub interest(undisclosed).State of the Industry Despite what should be favorable demographic and macro dynamics,dental consumable trends have not experienced a meaningful,sustained pick-up in demand since the 2008 recessionary timeframe,likely driven by rising out-of-pocket healthcare spend,representing a growing percentage of total discretionary income for consumers,share shifts to specialty,among other potential factors.While dental trends were broadly mixed in 4Q reports across manufacturers and distributors(see Dental Update:Recent Drivers Across Dental),industry commentary continues to point to a healthier,steadier experience near term,with seemingly stabilizing sell-out trends.That said,we remain cautious in suggesting a broader stabilization or pick-up in demand in 1Q,particularly in light of several company specific Dynamics.17 April 2019 Dental Update 5 Figure 1:Recent quarterly Dental demand trends as reported by industry constituents Source:Company data Patient volume&practice revenues According to our survey,47%of respondents experienced 0%to+5%+growth in patient visits in 1Q19(vs.47%in 4Q and 42%in 3Q18),with total volume increasing 0.5%on a weighted average basis,in line with the previous quarters experience.Over a quarter of respondents(27%)reported flat patient volume growth over the past three months.Notably,only 27%of respondents reported declines in patient visits during 1Q(vs.23%in 4Q and 31%in 3Q18).Figure 2:Dental practice volume(Y/Y growth)Respondent distribution Figure 3:Dental practice volume(Y/Y growth)+0.5%weighted avg.,in-line with the 4Q experience Source:Credit Suisse,n=75 Source:Credit Suisse,n=75 Practice revenues increased 0.7%on a weighted average basis in 1Q19,a sequentially better,though admittedly lackluster trend(vs.+0.5%in 4Q and+0.5%in 3Q).Practice revenues were driven by pricing(+0.9%),new patient traffic(+0.7%),bridges and implants(+0.6%),and orthodontics(+0.5%).As a caveat,this is our third dental survey,and we expect more meaningful takeaways to our dental coverage with greater historical context in future surveys.1Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q18Consumables+LSD+LSD+LSD-NegativeNegative-MSD-L-MSD-LDD+Slightly-MSD+LSDEquipment-LSD+MSD+MSD-Positive+LSD+LSD-MSD-HSD+Slightly-MSDFlatConsumables3.3%0.9%-2.5%-2.8%-4.3%-3.6%-4.4%-7.4%-6.7%-5.2%-2.2%-1.9%Equipment-6.9%5.4%4.2%-1.0%-16.9%-15.1%-17.7%-10.6%-20.2%5.4%-0.9%5.6%Consumables4.6%1.8%1.8%1.9%2.5%0.8%1.3%1.9%2.7%4.7%4.3%2.5%Equipment13.5%2.7%13.3%2.7%-5.5%14.8%-0.7%18.1%4.4%6.2%5.9%-4.3%Consumables1.6%4.5%2.7%2.5%8.0%1.4%3.4%-2.6%2.4%3.0%3.5%3.4%Equipment4.3%3.1%4.2%-3.9%3.1%3.6%2.6%7.7%3.1%4.7%-4.2%1.3%Consumables4.5%3.8%-0.3%3.5%2.4%2.0%4.3%3.9%-1.3%3.3%-3.0%5.4%Technologies6.8%0.8%0.2%0.0%-12.7%-10.0%-1.1%5.9%-1.6%-1.1%-9.3%-4.2%3MOral Care5.0%3.0%0.0%-1.0%5.0%0.0%3.0%3.0%0.0%3.0%2.0%4.0%ColteneConsumables2.7%4.2%1.8%2.8%1.0%3.3%Dentsply SironaDanaherPattersonHSIC N.A.HSIC Intl8%13%10%27%19%13%9%5%4%13%31%32%5%9%5%7%15%27%25%15%7%0%5%10%15%20%25%30%35%40%+5%or more3Q184Q181Q1947%of respondents have experienced+1%to 5%+in patient visits during 1Q190.2%0.5%0.5%0.0%0.2%0.4%0.6%0.8%1.0%3Q184Q181Q19 17 April 2019 Dental Update 6 Figure 4:Dental practice revenues(Y/Y)Respondent distribution Figure 5:Dental practice revenues(Y/Y)+0.7%weighted avg.,vs.+0.5%in 4Q Source:Credit Suisse,n=75 Source:Credit Suisse,n=75 Figure 6:Factors impacting practice revenues New patient traffic,acute care remain prominent drivers Source:Credit Suisse,n=75 NTM Outlook:Strengthening fundamentals Sentiment from respondents was optimistic for the next 12 months with 65%of dentists expecting stronger results in patient traffic in the coming months(vs.71%in 4Q and 65%in 3Q),a modestly positive read-through for dental manufacturers and distributors.On a weighted average basis,respondents expect patient visits to rise 1.4%over the next 12 months,compared to 1.9%in 4Q and 1.6%in 3Q.Only 16%of dentists in our survey expect declines in patient visits,a slightly more pessimistic view sequentially(from 8%in 4Q).8%12%9%25%21%9%17%8%7%9%29%25%12%9%7%5%19%17%29%9%13%0%5%10%15%20%25%30%35%+5%or more3Q184Q181Q1952%of respondents have experienced+1%to 5%+practice revenues during 1Q190.5%0.5%