1. The company is mainly engaged in pharmaceutical commercial business, mainly pure sales and distribution business, of which net sales account for about 70%. The company is the leading pharmaceutical business in Zhejiang Province, and ranked 11th among the national pharmaceutical commercial enterprises in 2011.

two。 Since 2010, the company has completed equity cooperation with Wenzhou Yingte Pharmaceutical Co., Ltd., Zhejiang InterHays and other equity companies, initially forming the strategic layout of eastern, southern, western and northern Zhejiang. The investment is about 200 million yuan to build a comprehensive pharmaceutical industry center in Jinhua Lanxi, which integrates business flow, logistics, information flow and capital flow, to complete the layout of central Zhejiang, and the company's intensive cultivation of the pharmaceutical commercial market in Zhejiang Province. consolidate the leading position in Zhejiang Province and strengthen the competitive advantage of the region.

3. In terms of the growth rate of net profit after deducting non-recurrent gains and losses, it grew by 38.36% year-on-year in the third quarter of 2012, compared with 22.79% in mid-2012. Net profit attributable to parent shares grew by 75.56% in the third quarter of 2012 compared with the same period a year earlier. The gross profit margin increased significantly in the third quarter of 2012, to 6.25%, and in the second quarter of 2012 to 5.67%. The rapid growth in performance benefited from the company's merger and acquisition integration in previous years.

4. In terms of net profit, it was 1.35% in the third quarter of 2012, 1.32% in the second quarter of 2012, and 1.28% in the first quarter of 2012, exceeding the level of the third and fourth quarters of 2011. The gross profit margin of the second quarter of 2012 was 5.67%, which exceeded the level of the first three quarters of 2011. It shows that the company has a sound operation and good profitability.

5. It is estimated that the operating income of the company from 2012 to 2014 is 10.709 billion yuan, 13.601 billion yuan and 17.409 billion yuan respectively, and the net profit belonging to the shareholders of the parent company is 66 million yuan, 9.1 billion yuan and 124 million yuan respectively. The earnings per share are 0.32, 0.44 and 0.60 yuan per share. Considering the early integration of the company, the company has the motivation to release performance in the year after next year. The current valuation is on the low side, corresponding to the 2013 price-to-earnings ratio of 19.52 times, which is recommended.

Risk Tips:

The integration of mergers and acquisitions is lower than expected, and the cost of enterprises is rising.