Main points of investment
The variety is undervalued, the curative effect is outstanding, and the ratio of performance to price is high. The company's leading variety Guhan health essence is an exclusive secret variety, over-the-counter drugs, with remarkable curative effect and a wide range of applications. it has outstanding health care effect for improving insomnia, improving night urination frequency, improving appetite and so on, and it is highly accepted by consumers. The annual sales volume of Hunan Province alone is close to 300 million yuan, which has the potential to replicate in the whole country.
Ancient Han health-preserving essence has room for price increase. This variety has been implementing the maximum retail price limit established in 2002, and the rise in product costs has seriously affected the company's profit space and market development enthusiasm. According to the announcement of the Hunan Provincial Price Bureau on May 15, the maximum retail price of 30 pieces of specifications has been raised from 68 yuan to 99 yuan, with a price increase of 45.6% and 20.6%. At present, the company has not raised the price in the terminal, the retail price of 30 specification terminals is only 60 yuan, and the phenomenon of price upside down is still serious. It is estimated that the company is expected to start raising prices at the terminal within half a year, which will play a vital role in improving the enthusiasm of dealers and the ability to open up markets outside the province.
The continued increase of major shareholders demonstrates their confidence in the long-term development of the company. Tsinghua Ziguang Group, a major shareholder of the company, announced at the end of 2012 that it would choose an opportunity to increase its holdings of no more than 5 million shares within a year, and senior executives of the company also increased their holdings one after another, demonstrating their confidence in future development. If the increase of 5 million shares is completed, the shareholding proportion of Ziguang Group will reach 20.26%. Hengyang SASAC holds 16.99% of the shares.
The new director is expected to bring about new changes. The company recently announced the resignation of former chairman Li Yi and nominated Qiao Zhicheng as a candidate director. General Manager Qiao used to be the core talent of Yongjin Department, general manager of Qianjin Pharmaceutical Industry and Secretary of Shanghai Fosun Pharmaceutical. He has a deep understanding of the pharmaceutical industry, Hunan local pharmaceutical market and capital market, which is expected to bring new energy to the company. After straightening out the price confusion and improving the distribution of dealers' interests, if the company is actively looking for inter-provincial chain dealer partners and cooperating with appropriate promotion and publicity, the volume of the market outside the province is worth looking forward to.
Profit forecast and investment rating. It is cautiously predicted that the company's earnings per share in 2013, 2014 and 2015 will be 0.16 yuan, 0.24 yuan and 0.31 yuan, and the corresponding price-to-earnings ratio will be 79, 55 and 42 times, taking into account the flexibility of the company's performance, if the product terminal price increase is implemented in place, the expansion of the market outside the province is expected to lead to better-than-expected performance, so it will be rated.
Risk hints: the chemical business may continue to lose money; the implementation of channel price increases is not effective; slow production expansion outside the province leads to lower-than-expected performance.
