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【中投证券】九芝堂:销售调整成效渐显,建议坚定持有

中投證券 ·  Nov 9, 2012 00:00  · Researches

Today, the company's stock price fell to a standstill. After communicating with the company, we believe that there is no problem with the fundamentals; this is an excessive reaction from the market. The decline in business performance in the first 9 months was due to the impact of active goods control. After the new general manager took office, marketing integration has been carried out since April. That is, actively control delivery, reduce and absorb channel inventory, and pave the way for marketing reforms. Comprehensive and effective integration has been carried out to regulate the market through channel control and prepayment delivery measures, but it has also inevitably affected sales revenue; at present, initial marketing adjustments have been put in place, and it has entered a healthy growth path. Judging from the recent sales situation, it is estimated that the company's product delivery payments increased 15% year on year in October, with actual pure sales exceeding 15%. The growth trend of Liuwei Dihuang Concentrated Pills and second-tier products has resumed a good momentum, indicating that the integration is showing initial results and will enter a healthy development path in the future. Overall revenue for the fourth quarter is expected to grow at a certain year-on-year rate; construction of investment projects is being implemented at an accelerated pace. The finished product warehouse of the Modern Traditional Chinese Medicine Science and Technology Industrial Park began to be put into use in the first half of the year. The formulation workshop was capped, and the pre-treatment base entered the construction phase in July. In addition, the company recently decided to invest 98 million yuan to establish the Lugu Logistics Center, 34 million to implement the new GMP transformation, and 240 million yuan for projects such as expanding production of key dosage forms and technological upgrading. At that time, it will better comprehensively enhance the company's technical, production capacity, and distribution capabilities; recommended ratings. Although the company's main products are facing fierce competition, the marketing foundation has been consolidated, and growth will continue to steadily resume in the future, and performance will gradually be reflected. We adjusted the company's EPS in 2012-14 to 0.56, 0.67, and 0.81 yuan, respectively, up -18%, 20%, and 21% year-on-year increases. Currently, the price is about 24 times that of 12PE, which is significantly lower than that of similar traditional Chinese medicine brands. It is recommended to consider intervention to maintain the recommended investment rating. Risk warning: The market for major products is highly competitive.

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