1. IPO purchase proposal:
The company is one of the leading pharmaceutical distributors in South China. The company's distribution network covers South China and Fujian Province and other areas. According to punctuation information, the company is the third largest private pharmaceutical distribution company in South China based on the revenue of pharmaceutical distribution business in 2014. According to punctuation information, South China's pharmaceutical distribution market accounted for about 10.5% of China's total pharmaceutical distribution market in 2014. According to punctuation information, for the year ended December 31, 2012, 2013 and 2014, the company's market share in the pharmaceutical distribution market in South China was about 2.3%, 2.2% and 2.4%, respectively. The market share in China's pharmaceutical distribution market is about 0.2%, 0.2% and 0.3%, respectively.
As of December 31, 2014, the turnover of the Company reached RMB 3014.1 million, the gross profit reached RMB 136.4 million and the profit attributable to the owners of the Company reached RMB36.40 million. From 2012 to 2014, the company's turnover and profits attributable to owners of the company grew at a compound annual rate of approximately 22.2% and 60.7%, respectively. For the years ended December 31, 2012, 2013 and 2014 and for the six months ended June 30, 2014 and 2015, the company's gross profit was approximately RMB87.3 million, RMB104.0 million, RMB136.4 million, RMB71.4 million and RMB83.6 million respectively. In the same period, the gross profit margin was about 4.3%, 4.3%, 4.5%, 4.9% and 5.1%, respectively. For the year ended 31 December 2012, 2013 and 2014 and the six months ended 30 June 2014 and 2015, the profits attributable to the owners of the Company are approximately RMB14.1 million, RMB22.2 million, RMB36.4 million, RMB26.4 million and RMB25.2 million respectively. In the same period, the net interest rate was relatively low, which was about 0.7%, 0.9%, 1.2%, 1.8% and 1.5%, respectively.
The guidance price per share is HK $7.60-HK $8.60, which is about times the price of static PE14. The company's business belongs to pharmaceutical distribution, with relatively low industry barriers, low gross profit margin and net profit margin, and little room for valuation improvement, so it is recommended to subscribe cautiously.