Summary:
Guangdong Jiaying Pharmaceutical was founded on March 7, 2003. It is a professional traditional Chinese medicine manufacturer integrating R&D, production and sales, with core technology with independent intellectual property rights. Currently, the company has 5 dosage forms and 65 drug varieties, including 48 OTC varieties and 26 varieties included in the national medical insurance catalogue. They are mainly proprietary Chinese medicines for throat, colds, gastrointestinal, and nutritional supplements. They are protected by national patents, national traditional Chinese medicine protection, and exclusively produced branded products such as double dose throat lozenges, double feed throat lozenges, heavy sensitivity tablets, and Gujing ginseng pills. 2016 is the year when the company's “natural ice flakes” are fully harvested. It is estimated that 15,000 mu can be harvested, and sales channels should be fully established. At the same time, production and planting experience is gradually maturing. Assuming that the production of natural ice flakes per mu increases to 15 kg. Production 225 tons. However, due to large-scale listing, the average sales price fell back to 2,000 yuan/kg. We expect to achieve sales revenue of 450 million yuan.
The acquisition of Jinsha Pharmaceutical ushered in an inflection point in performance. In 2010-2012, Jinsha Pharmaceutical achieved operating income of 148 million yuan, 220 million yuan and 264 million yuan respectively, and achieved net profit of 554.527 million yuan, 61.8031 million yuan and 486.25 million yuan. However, in these three years, Jiaying Pharmaceutical's operating income was 75 million yuan, 86 million yuan, and 104 million yuan. Due to the double compression of costs and expenses, net profit was only 25.247 million yuan, 202386 million yuan and 7,5681 million yuan.
On December 30, 2013, Jiaying Pharmaceutical signed the “Equity Transfer Agreement between Guangdong Jiaying Pharmaceutical Co., Ltd. and Ling Fengqing on 45% of Guangdong Huaqingyuan Biotechnology's shares” with Huaqingyuan Biotech's shareholder Ling Fengqing, becoming the main shareholder of Huaqingyuan Biotech. Huaqingyuan Biotech is a high-tech joint stock enterprise specializing in plum blossom cultivation, natural dextrin production, scientific research and new product development.
Profit forecast: The natural ice sheet business will help the company enter a new period of growth. EPS is predicted to be 0.13/0.20/0.27 yuan in 15-17, respectively, giving it an “increase in holdings” rating.
Risk warning: The parent company's product market competition is fierce, and the growth rate has not continued; the results of the integration of Jinsha Pharmaceutical are poor; administrative drug price cuts.