Main potential risks

1. The risk of a single product structure. In recent years, the gross profit of the company's leading product breviscapine for injection accounts for more than 95%, or even more than 99% of the gross profit of the company's main business. The production and sales of breviscapine for injection determine the company's main business income and profit level. if there are adverse changes in the production or sales of breviscapine in the future, it may have a significant impact on the company's business.

2. Substitution risk of chemical synthetic products. The content of breviscapine, the main active ingredient in breviscapine for injection, is more than 98%. Professional data show that breviscapine has been obtained by a number of artificial chemical synthesis since 1974. At present, there is only one authorized patent for chemical synthesis of breviscapine in China, and the synthetic breviscapine is still in the stage of laboratory trial production. Once a major breakthrough is made and large-scale industrial production is realized, the competition pattern of breviscapine may change greatly.

Valuation

The issuer works in the pharmaceutical manufacturing industry, and as of March 9, 2015, the China Securities Index Co., Ltd. released an average static price-to-earnings ratio of 45.16 times for the latest month. It is estimated that the company's earnings per share in 2014, 2015 and 2016 are 0.95 yuan, 1.39 yuan and 1.68 yuan respectively. Considering the current market conditions, combined with the company's issue price of 21.21 yuan (corresponding to 22.99 times diluted price-to-earnings ratio in 2014), the initial pressure is expected to be 52 yuan-56 yuan.