I. Overview of events
On September 29, 2016, the company announced that it plans to invest 32.5 million yuan to set up a medical holding company with Zhongying Medical and Mr. Wang Feng, the actual controller of Zhongying Medical, which accounts for 65% of the shares of the medical holding company. At the same time, the company will provide the medical holding company with a loan of no more than 300 million yuan within three years after its establishment, with a loan period of not less than five years, which is specially used to acquire, build or operate hospitals.
II. Analysis and judgment
Strong cooperation and complementary advantages
Zhongying Medical focuses on developing full-process remote mobile medical services, and cooperates with Shaanxi Health and Family Planning Commission and Tongchuan Health and Family Planning Bureau to undertake the construction of Shaanxi's first Internet hospital and Shaanxi Internet Medical data Cooperation Center. In this cooperation, Zhongying will coordinate doctor resources to promote the holding company to invest in sub-hospitals, while Huabang will be responsible for introducing high-quality hospital assets, providing financial and credit support to the project, and making use of the superior resources of both sides to expand and strengthen the holding company.
Actively lay out the medical industry and build a new profit growth point. This foreign investment is another important measure for the company to lay out the "big health" industry. As the carrier of new construction or merger and reorganization of hospitals in the national region, the medical holding company will continue to gather physician resources and medical resources in the future to build new profit growth points for the company. Since the company holds 10% of Zhongying Medical, and Zhongying Medical holds 10% of the holding company, the company actually holds 66% of the holding company.
The performance is basically in line with expectations, and is optimistic about the development prospect of the pharmaceutical sector.
The company's main business also includes pharmaceutical and agrochemical business. The revenue of pharmaceutical products in the first half of the year was 933 million, an increase of 1.99% over the same period last year. Affected by the slowdown in the overall growth of the industry, the pharmaceutical sector grew slowly. However, based on the rich reserves of research products of subsidiary Huabang Pharmaceutical and its leading position in the field of skin and tuberculosis drugs, coupled with the expansion of Parkson Pharmaceutical last year, we are still optimistic about the prospects of the pharmaceutical sector of the company.
Third, profit forecast and investment suggestions
It is estimated that from 2016 to 2018, the EPS of the company will be 0.39,0.47,0.56 yuan respectively, and the corresponding PE will be 24,20,17 times respectively. We are optimistic about the future development space and potential of the company, and continue to maintain the "highly recommended" rating.
Fourth, risk tips:
Drug prices are reduced; the operating performance of medical holding companies is lower than expected; and the progress of overseas business layout is lower than expected.