Summary of the report:
1. The replacement of new and old management is over, Sunflower begins a new period of development.
Sunflower Pharmaceutical Co., Ltd. focuses on the production of proprietary Chinese medicine, covering drug research and development, manufacturing and marketing. It is a leading OTC enterprise with outstanding brand ability in traditional Chinese medicine paediatrics. 2019-2020 is the transition period of the company, at this stage, the management of the company experienced the replacement of the new and the old, superimposed the impact of the 2020 epidemic, and the overall performance declined. The company's performance picked up significantly in 2021, with revenue and net profit rising by 28.9% and 20.6%, respectively, compared with the same period last year. At present, the company's business structure is stable, profitability indicators are at a high level in the industry and showing a trend of growth. At present, the company has made a smooth transition and opened a new period of development.
two。 The policy continues to be positive, and the long-term logic of "price increase + marketing reform + end-to-end cooperation" is that China's OTC market will exceed 250 billion yuan in 2020, while the global OTC market will exceed 100 billion US dollars. In the context of the upgrading of household consumption and the rising pressure on medical insurance payments, we believe that the trend of OTC market expansion remains unchanged. On the policy side, the national level has been a strong support for the development of traditional Chinese medicine, brand traditional Chinese medicine OTC enterprises are expected to benefit. On the price side, the policy liberalizes the maximum retail price limit, and the brand OTC ushered in a rising tide of prices. On the marketing side, the channel pull mode is changed to the terminal drive mode. At the level of terminal cooperation, the end-to-end cooperation between pharmaceutical companies and chain drugstores to reduce circulation and improve the gross profit margin space of chain drugstores will help to promote brand OTC to seize the market share of general medicine and enhance the market concentration of brand OTC.
3. Products are rich and echelon distribution, sitting on the well-known paediatrics OTC brand company in the sale of nearly 300 varieties, reserve varieties of more than 1000, has formed a "one small, one woman, one old" as the category of product pattern, a comprehensive layout of pediatrics, gynaecology, digestive system, respiratory and cold department, cardio-cerebrovascular department six major treatment areas. In 2021, the company has 11 varieties with sales of more than 100 million and 75 varieties with sales of more than 10 million. The field of children's medicine is far ahead of the industry, "Little Sunflower" has become a well-known brand of children's medicine OTC, the core variety of children's lung heat granule sales of more than 450 million yuan, digestive system medicine to protect the liver tablet sales of more than 600 million yuan, gynecological medicine according to the theory of Chinese medicine development for extensive layout, the core varieties include Kangfu Xiaoyan suppository, Dingkundan and so on.
4. Brand + marketing + outsourcing and internal research + quality control, the four elements cast the enterprise's core competitiveness in terms of brand, sunflower brand strength is strong, public recognition is high, it ranks among the best in many brand research, and strong brand power effectively drives the overall category growth. at the same time, the company has opened new media marketing to consolidate brand image, and the company's brand strength is expected to continue to improve in the future.
In terms of marketing, Sunflower Pharmaceutical Co., Ltd. has established contacts with nearly 10,000 grade hospitals and more than 300000 medical terminals to achieve full coverage except the Tibet Autonomous region, and its sales capacity is in the forefront of the industry. In terms of research and development, the company outlines the acquisition of more than 1100 drug approvals, and grafts brand strength, marketing channels and other resources for new varieties, thus driving the rapid release of new varieties; at the same time, the company attaches importance to self-research pipelines, and internal R & D investment continues to increase in recent years.
In terms of quality control, the company continues to implement the strategy of "creating high-quality drugs" and puts forward the "ten-step method of building high-quality drugs" to ensure the high quality of drugs.
Profit forecast: we estimate that the company's revenue from 2022 to 2024 is 5.05 billion yuan, 5.814 billion yuan and 6.697 billion yuan respectively, an increase of 13.21%, 15.13% and 15.19% respectively over the same period last year. It is estimated that the net profit from 2022 to 2024 will be 862 million yuan, 998 million yuan and 1.181 billion yuan, up 22.31%, 15.77% and 18.34% respectively over the same period last year, and the share price PE before the corresponding period is 13 times, 11 times and 9 times respectively. Maintain the "highly recommended" rating.
Risk tips: the continuing impact of the epidemic; sales do not meet expectations; drug safety risk; research and development is not as expected risk; new product launch is not as expected risk.