This report is read as follows:
The company has two characteristic varieties of traditional Chinese medicine Zhike Bao tablet and Jinkui Shenqi tablet. In recent years, the steady growth of the two varieties has led to the improvement of the company's profitability.
Main points of investment:
We estimate 2014-2016 net profit of 86 million million, 90 million yuan, corresponding to EPS (calculated by issuing 25 million shares) 0.86,0.90,0.96 yuan. With reference to A-share comparable anti-infection and cough medicine listed companies, the average 2014PE is 31x. Considering the low growth rate of the company in the next three years, the company is reasonably valued at 2014PE22-24 times, and the corresponding reasonable price range is 18.92-20.64 yuan. Considering that the company does not transfer the old shares and does not exceed the offering price, the issue price is 14 yuan (raised funds + issuance expenses) / issuance quantity.
The product structure is optimized and the profitability is improved year by year. The company's products include cough and expectorant drugs, kidney tonifying drugs and anti-infective drugs, among which Zhikebao tablets and Jinkui Shenqi tablets, the core varieties with high gross profit margin, have grown steadily, with the proportion of income rising from less than 20% in 2008 to 36% in 2013, driving the company's comprehensive gross profit margin to rise year by year. Zhike Bao tablet South China market has a certain brand awareness, currently in the cough expectorant market in the second-tier brand position. Steady growth through the expansion of markets outside South China. Jinkui Shenqi tablet has been included in the national essential medicine catalogue. At present, the company has won the bid in 24 provinces and regions, and the winning price is basically stable. Due to capacity bottlenecks, the growth rate of Jinkui Shenqi tablets slowed to 5.5% in 2013.
Variety adjustment + limit the impact of resistance, anti-infection products to maintain the existing scale. The company's anti-infective products include erythromycin enteric-coated tablets, relying on erythromycin tablets, erythromycin tablets and other varieties. Due to the suspension of production of mycin tablets in 2013 due to process transformation, and the implementation of the "measures for the Management of Clinical Application of antimicrobials" in August 2012, the restrictions on anti-infection were tightened, and the company's sales of anti-infective products fell 6.5% in 2013. We judge that the limited resistance policy will still be tight, and the company's anti-infection products will maintain the status quo.
Fund-raising project: the total budget of the fund-raising project is 320 million, of which 250 million is used to expand the production line of Zhikebao tablets, Jinkui Shenqi tablets and anti-infective drugs, and expand the production capacity of the company's main varieties. The rest of the money is used to strengthen R & D and marketing.
Risk hint: market competition aggravates the risk, drug price reduction risk, limit the risk of tightening policy.