Jiuzhitang 300-year-old Chinese time-honored brand, inheriting a large variety of traditional Chinese medicine, covering for the first time, given a "buy" rating, the predecessor of Jiuzhitang, "Lao Jiuzhitang Pharmacy", originated in 1650 and inherited for more than 300 years. Since the establishment of modern Jiuzhitang, with the research and development, production and sales of traditional Chinese medicine as the core, we have gradually explored the layout of innovative businesses such as stem cells, medical and health services of traditional Chinese medicine, and homologous products of medicine and food. now it has developed into a large modern pharmaceutical enterprise integrating scientific research, production, sales and health management. We estimate that the return net profit of the company from 2022 to 2024 is 3.35,4.38 and 568 million yuan respectively, and the corresponding EPS is 0.39,0.51,0.66 yuan per share respectively. The current stock price corresponds to PE 27.0,20.7,15.9 times. The company's industrial plate OTC series, prescription drug series of leading products have great volume potential, and the product matrix is mature. at the same time, the company enhances sustainable growth through capacity expansion, channel expansion and layout of stem cell research and development, covering for the first time and giving a "buy" rating.
OTC series products take the lead in the market and have great potential for growth. The steady growth of prescription drugs series is expected to have more than 600 million varieties in the company's industrial sector. Over the years, it has formed its own brand influence and recognition, and has a good volume foundation. The five items in the first echelon of OTC plate rank among the top three in the terminal market share of retail drugstores in 2020, and are expected to maintain a high growth trend in the future. The company raised the prices of some OTC products in 2022, and with the release of epidemic control policies in 2023, the company's price increases are expected to lead to increased performance. Prescription drug plate company Shuxuetong injection product re-evaluation work steadily led to a steady rebound in product sales. The company is actively applying to enter the base drug catalogue for the exclusive variety Tianma Gouteng granule, which has great potential for growth.
Capacity expansion, channel expansion, R & D forward-looking layout, capacity expansion for long-term growth, the company invested 185 million yuan in 2018 to invest 185 million yuan in the new Jiuzhitang National Pharmaceutical Health Industrial Park (phase I) project, and an additional investment of 195 million yuan in 2021 to expand the company's production capacity, improve product quality, and improve product structure. In terms of channel development, 5% of the company's equity and 51% of Hunan Jiuzhitang Pharmaceutical held by the company were sold to Yifeng Pharmacy in 2022, forming a strategic cooperation. The company's commercial sector stores are expected to form a synergistic effect with Yifeng pharmacy stores in the future. The expansion of the company's products in Yifeng pharmacy retail channels and the degree of cooperation are expected to continue to strengthen. In terms of R & D layout, the field of stem cells has been distributed since 2018. The preclinical research carried out by Beijing Meike, a stem cell research company established by the company, continues to advance in the treatment of other diseases, and is expected to walk out of a new growth curve.
Risk tips: the promotion of channels is not as expected, the price of traditional Chinese medicine is rising, and so on.