The Xu family holding company holds a total of 90% of the shares before the offering: the company, formerly known as Taicheng Pharmaceutical Co., Ltd., Taishan City, was established by Xu Weigao and Xu Danqing in May 2002, and was formed through multiple capital increases and equity transfers. At present, the actual control of the company is Xu Danqing, which holds 31.05% after the issue. the company is a family enterprise, and the Xu family accounts for 90% of the company before the issue.

Revenue and net profit increased steadily from 2009 to 2013: the company achieved steady growth in revenue and profit, especially the market sales of Zhikebao and Jinkui kidney tablets have begun to take shape. The company's revenue increased from 202 million to 343 million in 2009-2013, with a compound growth rate of 14.15%, net profit from 24.1 million to 93.47 million, and a compound growth rate of 40.33%. In the first quarter of 2014, the company achieved revenue of 79.26 million and net profit of 22.98 million.

Analysis of the company's core competitive advantage: the variety of products is rich, the structure is reasonable; the products produced by the company are commonly used drugs, most of the products are safe, effective and cheap with price advantage; the core products have profound influence and good reputation in the region.

Fund-raising projects: the funds raised are mainly used for 96.6872 million yuan for Zhikebao production line expansion project, 47.2861 million yuan for Jinkui Shenqi tablet production line expansion project, 104.9351 million yuan for anti-infective drugs and other products production line expansion project, 41.8212 million yuan for drug R & D technology center construction project, 3108.30 yuan for marketing network expansion and information system construction and technical renovation projects.

The risk reveals that the increase of non-core products does not increase profits, the over-concentration of sales areas, the lack of production capacity caused by the failure to complete the production line expansion project, and the intensification of competition lead to the decline of drug prices.

We estimate that the fully diluted EPS of the company in 2014, 2015 and 2016 will be 0.97,1.20 and 1.39 yuan, respectively. Combined with the growth of the company and the valuation level of the pharmaceutical manufacturer, we will give the company a reasonable price range of 25 times PE in 2014. If the price-to-earnings ratio of the issue is low, we suggest that we focus on it.