1. IPO purchase proposal:
The company is the third largest supplier of marketing, promotion and channel management services in China's pharmaceutical industry, with a 6.4% market share. According to the Frost Sullivan report, China's marketing, promotion and channel management service market is part of China's pharmaceutical circulation market, with a market size of 15 billion yuan in 2014, accounting for about 1.0% of China's pharmaceutical circulation market. The company is also the only supplier of marketing, promotion and channel management services for plasma drugs in China. According to Frost Sullivan's report, China's plasma drug market grew at a compound annual rate of 23.2% from 2010 to 2014, higher than the compound annual growth rate of China's overall pharmaceutical market and imported drug market in the same period. Driven by the shortage of plasma drugs, favorable government measures, market development and the improvement of manufacturing technology in China, the plasma drug market is expected to grow at a compound annual growth rate of 22.4% from 2015 to 2019, according to the Frost Sullivan report.
The company's product portfolio consists of China Plasma Pharmaceutical Division and other imported drugs that are growing rapidly or have a considerable market size. Over the past five years, several market segments of the company's product portfolio (i.e. Oncology and Hematology) have grown faster than the overall growth level of drugs imported into China. The company's products include human serum albumin injection, human serum albumin injection is an one-person serum albumin product. Human serum albumin injection is manufactured by Okkert Fama, and Okkert Fama is one of the world's leading manufacturers of plasma drugs in terms of global sales earnings in 2014, according to the Frost Sullivan report. Oktefama authorizes the company to serve its exclusive supplier of human serum albumin injection in 24 provinces, municipalities and autonomous regions of China.
The company's revenue increased from RMB 26.2 million in 2012 to RMB 532.5 million in 2013 and then to RMB 950.1 million in 2014. For the ten months ended October 31, 2015, the company recorded a profit of RMB 850.8 million. In 2012, 2013, 2014 and the first ten months of 2015, the company's gross profit was RMB 3.2 million, RMB 61.1 million, RMB 129.8 million and RMB 113.4 million, respectively, and the gross profit margin for the related period was 12.4%, 11.5%, 13.7% and 13.3%, respectively. For the years ended December 31, 2012, 2013 and 2014, and for the ten months ended October 31, 2015, the company's gross profit margin was 12.4%, 11.5%, 13.7% and 13.3%, respectively, and its net profit margin was 1.0%, 8.1%, 8.4% and 6.0%, respectively. The net profit attributed to the parent company from 2013 to 2014 was 36.53 million yuan, 69.36 million yuan, and 50.64 million yuan and 51.08 million yuan in the first 10 months of 2014-2015.
The guidance price per share is HK $0.80-HK $1.11, which is equivalent to about 22 times the price of PE16 -. The valuation of the company is not undervalued, considering that investors in the Hong Kong stock market are cautious at present, it is recommended to subscribe cautiously.