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【恒泰证券】华通医药:预计公司上市初期股价压力位为42元-45元

恆泰證券 ·  May 19, 2015 00:00  · Researches

Company Overview: The company's main business is pharmaceutical wholesale and chain retail in Zhejiang. Both account for more than 85% of the company's revenue and profit. At the same time, the company is also involved in small-scale pharmaceutical production, third-party drug logistics business, and exhibition business. The controlling shareholder of the company is Huatong Group, accounting for 35% of the shares before issuance. The actual controller of the company is the supply and marketing agency in Keqiao District, Shaoxing City. Industry status and prospects: The pharmaceutical distribution industry is large and the concentration is low. By the end of 2012, China had 16,300 pharmaceutical wholesale enterprises, 3,107 pharmaceutical retail chains, 152,600 stores under its administration, 271,100 retail single pharmacies, and a total of 423,700 retail pharmacy stores. The size of the drug distribution market maintained a relatively rapid growth rate in 2013, but the growth rate slowed. The total sales volume of the pharmaceutical distribution industry reached 1303.6 billion yuan for the whole year, an increase of 16.7% over the previous year, and the compound growth rate from 2005 to 2013 was 20%. The concentration of the pharmaceutical distribution industry in developed countries is over 75%, and China's is 28%. Compared with developed countries, the concentration of the pharmaceutical distribution industry in China is lower. The chain transformation of the pharmaceutical retail industry is a trend. The number of retail pharmacies in China rose from 250,000 in 2005 to 430,000 in 2013, and the chain rate rose from 27% in 2007 to 37% in 2013. Pharmaceutical retail enterprises develop chain operations, which is beneficial to the development and growth of enterprises themselves, accelerate standardization and modernization of management methods, give full play to the advantages of large-scale operations, and improve economic efficiency and resilience to risks. To this end, the Ministry of Commerce clearly stated in the overall goal of the “Outline of the National Drug Distribution Industry Development Plan (2011-2015)” issued in May 2011 that the share of pharmacy chains in all retail stores in the next five years will increase from 1/3 now to more than 2/3. Company highlights: Rooted at the grassroots level and serving the “three rural areas”. The company was transformed from an enterprise affiliated with a supply and marketing agency. It is firmly rooted at the grassroots level in rural areas, and has the distinct characteristic of serving the “three rural areas.” The company's rural village and town level 1 pharmacies accounted for about 70% of the total number of chain stores in the past three years, and the cumulative three-year average ratio of rural store sales to total drug retail sales was 53.11%. The company maintains a differentiated competitive advantage in business development, and the country's policies to support rural pharmaceutical distribution and enterprises owned by supply and marketing cooperatives will provide strong policy support for the company's long-term development. Regional terminal channel advantages. The first channel established by the company is its own retail pharmacy chain network, which directly targets end consumers; the second is the company's wholesale channel, which mainly targets municipal and county-level medical institutions, primary medical institutions in urban communities and rural townships, individual clinics, and retail pharmacies, and mainly end customers. The company's wholesale network covers all public medical institutions in urban and rural markets within the Shaoxing region. The company has always focused on building regional terminal sales channels. The direct coverage capacity of terminals in the region is strong, the net sales rate of drugs has always been above 90%, and the strong direct coverage capacity of terminals within the region also forms an important channel advantage for the company. The fund-raising project 1. It is proposed to raise 120 million yuan for the second phase of the pharmaceutical logistics construction project; 2. It is proposed to raise 0.61 billion yuan for the pharmacy chain expansion project; 3. It is proposed to raise 40 million yuan for the pharmaceutical wholesale business expansion project, which is the main potential risk 1. Regional market competition will increase the risk. Currently, the company's main business area is in the Shaoxing region, and is gradually moving towards the Zhejiang provincial market. Zhejiang Province is an economically developed region and is more likely to attract new entrants. In addition, large-scale pharmaceutical commercial enterprises in the region themselves have further developed, making competition in the pharmaceutical market in the region more intense. 2. Retail chain business development risks. The risks that may be faced during the pharmacy chain expansion process include: brand awareness is low in regions other than Shaoxing, such as Hangzhou, etc.; opening a new store requires a certain nurturing period to achieve large-scale operation and profit; difficulties in renting and renewing a property in a good location for business use at an appropriate price; loss of retail chain outlets due to intense competition; and damage to the company's image due to poor management of new stores. The valuation issuer's industry is the wholesale industry. As of May 14, 2015, the average static price-earnings ratio of the industry published by China Securities Index Co., Ltd. in the last month was 53.78 times. The company's earnings per share in 2015 and 2016 are expected to be 0.95 yuan and 1.09 yuan, respectively. Based on the current market situation, combined with the company's issuance price of 18.04 yuan (corresponding to the diluted price-earnings ratio of 22.98 times in 2014), it is estimated that the company's stock price pressure at the beginning of listing will be 42 yuan to 45 yuan.

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