No more than 80 million to buy the remaining stake in Yongzi Hall, the purchase price is basically the same as 350 million in 2013. The company announced that according to the acquisition agreement agreed in October 2013, under the condition that the asset-liability ratio is not higher than 40%, Mr. Zhu Minghao, a natural person, can transfer the remaining 20% equity of Yongzi Hall to a listed company. The transfer price is 70 million + Yongzitang can be audited for shareholders to distribute profits X20%, the preliminary estimate is 75 million, the overall is not more than 80 million. In terms of 75 million, Yongzi Tong as a whole is valued at 375 million, which is not much different from the 2013 purchase price of 353 million (282 million of the 80 per cent stake). It is basically a parity acquisition.

The marketing reform of Yongzi Hall has been basically completed, and the core products have begun to enter the harvest period. After Yongzi Tang became a holding subsidiary in October 2013, the company has a number of exclusive varieties such as Tianma Xingnao capsule, which has greatly enriched the company's reserve of proprietary Chinese medicine. With the help of the mature sales model of the company's Si Mo Tang products, the company began to carry out the marketing reform of Yongzi Tang. While retaining the original sales team of Yongzi Tang, it dispatched the company's professional marketing backbone to develop the market and channels. At the same time, the price and settlement method of Yongzi Tang's core products were adjusted. After 2 years of accumulation and development, the pain period of Yongzi Tang has passed and began to enter a new stage of development. Yongzi Hall's operating revenue is expected to reach 130 million in 2015, a big increase from 67 million in 2012, and its net profit is expected to reach 15 million in 2015, exceeding 13 million in 2012. With Yongzitang becoming a wholly-owned subsidiary, we believe that listed companies will further increase their capital investment, management output and marketing investment, and the sales of core products and some second-tier products will continue to increase. Yongzitang will become a new source of profit for the company.

On the basis of drugs, extending to the upper and lower reaches of the industrial chain, the industrial chain for women and children has initially taken shape. After years of development, Simotang oral liquid, the core product of the company, has high brand awareness and market share in the gynecological and pediatric markets, and is the main source of profit for the company. In 2014, the company established the development strategy from single-wheel drive to two-wheel drive. While maintaining endogenous steady growth, the company began to develop externally. The upstream has laid out authentic GAP bases of traditional Chinese medicine, and the downstream has entered the field of maternal and child medical services through cooperation with local mainstream women's and children's hospitals, forming an embryonic form of the industry chain of drugs + services.

Slightly lower the profit forecast and maintain the overweight rating. We slightly reduced the company's net profit for 15-17 years to 1.08,1.31 and 160 million yuan respectively (the previous value was 1.17,1.58 and 188 million), with year-on-year growth rates of-8.2%, 21.3% and 22.1% respectively, with corresponding EPS of 0.36,0.44 and 0.54 yuan, and corresponding PE of 47, 38 and 31 times. The company belongs to the brand traditional Chinese medicine enterprise, Simo decoction is well-known and has a high market share in pediatric digestion and other fields. On the basis of the pharmaceutical industry, the company extends to the upper and lower reaches of the industrial chain, arranges the planting of traditional Chinese medicine, develops the medical service industry for women and children, and the dual industry of drugs and services is initially formed. we expect that the layout of the company around the industrial chain is expected to continue. the disturbance of the stock price in the short-term fixed increase plan does not affect the company's long-term investment value, and the increase of major shareholders also shows confidence in future development and maintains the rating of increasing holdings.