Conclusion:

The overall operating condition of the company is relatively stable. In recent years, due to the tilt of the new medical reform policy on the outpatient reimbursement system of public medical institutions and the rapid development of community grass-roots medical institutions, it has indeed diverted the passenger flow of urban retail chain enterprises to a certain extent, and the operation of local pharmaceutical chain enterprises has been greatly affected. However, in some large cities, such as Beijing and Shanghai, the competent authorities have set some restrictions on the distribution pattern of local retail drugstores, so the local large chain has the barrier of entry and part of the resource attribute. After taking over the medicine circulation, the Ministry of Commerce is conducting pilot and research on the separation of medicine and medicine in community medical institutions in Hunan, Beijing, Shanghai and other areas. If the separation of community medicine can be implemented in the future, that is, patients can buy drugs directly from social retail pharmacies on the basis of prescriptions, then the warming of policy and passenger flow will bring rare development opportunities for community medical institutions to develop large chain enterprises in better areas.

At present, due to the specific reimbursement policy and system has not been implemented and carried out, the company's overall business and performance growth is mainly stable development, we expect 2012-2014 EPS of 0.19.0.22 and 0.25 yuan, the current stock price corresponding to PE is 40 times, 35 times, 30 times, the current relative valuation is relatively high, given a "neutral" rating.