Since the implementation of the restricted resistance policy, the company's main business antibiotics have been suppressed, but it has stabilized since 2013; acquired Hailisheng and Bering Group to enter the field of children's products and maternal health products; and acquired Hangzhou Enshi Gene in 2014. enter the business of gene preservation and environmental pollutant detection.

At present, Qianyuan Pharmaceutical's main business consists of four parts: characteristic antibiotics (parent company), children's drugs and urinary system drugs (Hailisheng), maternal health products (Bao Ling), and gene preservation (Enshi gene).

Has transformed from a traditional antibiotic company to a company focusing on pregnant women and children; another dimension of change is based on the pharmaceutical industry, gradually involved in the health service industry. The company set up a merger and acquisition fund with Shanghai Panlin Capital, which we think is intended to seek industrial mergers and acquisitions; from the company's last three mergers and acquisitions, the project quality is getting better; the company has been operating in the field of maternal and child medicine for many years, and the marketing team is mature, therefore, we are optimistic about the company's potential for Enshi gene, opening up the space for health service business.

Without considering mergers and acquisitions, it is estimated that the EPS for 2014-2016 will be 0.33,0.62,0.85 yuan, with a current market capitalization of 3.96 billion yuan. Considering that the transformation of the company has just begun, Enshi Gene has entered the market where we estimate that there are hundreds of millions of yuan in profit (the company's net profit in 2013 is 27.11 million yuan). We are optimistic about the future development of the company and give it a 12-month target price of 50 yuan, corresponding to 59 times of PE in 2016, and a "buy" rating for the first time.