Valuation and investment advice

The main points of the company are as follows:

1. Successful transformation from a mainly third-party product distributor to a comprehensive pharmaceutical company.

2. The two subsidiaries entered into a joint venture agreement with Sinopharm Health, a subsidiary of Sinopharm Group (01099), to jointly fund the establishment of Shanghai Xinhe Pharmaceutical Co., Ltd.

3. The exclusive agent product Libaoduo has successfully won the bid to become a serious illness medical insurance product in Zhejiang Province.

4. The new drug Xidi Ke has been included in the selection database of major new drug creation special projects.

It is predicted that the net profits belonging to the parent company from 2015 to 2017 are 71.54 million yuan, 130.15 million yuan and 174.3 million yuan respectively, and the corresponding earnings per share are 0.05,0.08,0.11 yuan respectively.

According to the 2015 mid-year report, the company's net profit increased by more than 1400% in the first half of 2015 compared with the same period last year, mainly due to a significant increase in gross profit margin and a sharp drop in financing costs.

Core hypothesis or logic

According to the analysis, make the following assumptions about sales revenue:

1. The price of the company's products remains stable, and the gross profit margin of the products is slightly lower.

2. The agent of Fudaxin shrank further.

3. The sales volume of the exclusive agent Libaoduo has increased steadily in Zhejiang Province.

4. Steady growth of self-owned products

The main risks of core assumptions or logic

1. Product prices fell higher than expected

two。 The growth rate of drug sales slowed down and mergers and acquisitions were not successful.