Main points of investment:? The actual controller of the company is the Yangzhou State-owned assets Supervision and Administration Commission, and the predecessor of the company is the Yangzhou Pharmaceutical Factory. Although it has been reformed by the listed shareholding system, the traces of the old state-owned enterprises are still clear. From the process of our research, we can feel that the vitality of the enterprise is insufficient, the number of employees is obvious, and the work efficiency is low. At present, Lianhuan Pharmaceutical itself is still an "old state-owned enterprise and old mechanism".
From 2005 to 2008, the company's main revenue growth rate is less than 20%, but the company's operating profit margin has declined significantly since 2007, from 8.13% in 2006 to 4.14% in 2007. It can be seen that the company has spent a lot on expenses in the past two years. Taken together, the company's performance over the years can only be called "mediocre", walking forward in survival.
The company's main products are concentrated in three series of anti-allergic drugs, anti-cardiovascular drugs and urology drugs. Among them, the leading product of the company in the field of anti-allergic drugs is terfenadine (Mindi), and the leading product of the series of anticardiovascular drugs is felodipine tablets (bicyclopine). According to the investigation, these two varieties account for more than 60% of the revenue of the series. Urology drugs are mainly contributed by Epriet. From the table below, we can also see that the sales of each large series of the company are only tens of millions, and the largest anti-allergy drugs, the three-level variety series, have only sold 60 million, which is less than the single-variety sales of other pharmaceutical listed companies.
Yangzhou Lianbo Pharmaceutical Co., Ltd., a subsidiary of Lianhuan Pharmaceutical Group, a major shareholder, has a sales value of nearly 300 million yuan in 2007, and 90% of its products are sold to the international market. The company's participation in the first phase of Yangzhou Lianao project began trial production in January this year and was officially put into production in June. The annual sales are expected to reach 200 million yuan. We expect to contribute 80-10 million of the profits to the listed companies every year.
According to our earnings forecasts for 2009 and 2010, the current dynamic price-to-earnings ratio of Lianhuan Pharmaceutical is as high as 54.7 times and 37.04 times, which is much higher than the industry and market valuation in the same period. Therefore, Lianhuan Pharmaceutical is given a "wait-and-see" rating for the time being. We expect the company to change in a different way in order to gain new life and development.
