Main points of investment
Cerebrovascular chemicals in China are mainly brain protective agents, and the drug market is gradually expanding. With the gradual increase of the elderly population and the enhancement of people's health awareness, the population of cardio-cerebrovascular drugs in China is expanding, and the cerebrovascular drug market in China has maintained a steady growth trend. In recent years, cerebrovascular chemicals in China are mainly used as brain protective agents. The market sales of cerebrovascular chemicals in China increased from 21.699 billion yuan in 2009 to 72.865 billion yuan in 2016, with a compound growth rate of 18.89% over the past eight years. With the growth of patients with all kinds of cerebrovascular diseases in China, the market of cerebrovascular drugs and brain protective agents will gradually grow.
An important brain protective agent enterprise with the combination of third-party cooperation mode and independent production mode. The company is an important pharmaceutical company of brain protective agents in China, and takes into account both digestive drugs and antibiotics, in which the leading products developed by the company are GM1 injection and brain protein hydrolysates for injection, which are produced in a third-party cooperation mode. Through production cooperation with Southwest Pharmaceutical and Shanxi Pude, high investment in the construction of the production line at the initial stage of the company has been saved. Independent research and development of GM1 raw materials, pantoprazole sodium for injection, milrinone and other drug varieties adopt independent production mode.
Valuation and investment advice: we expect the company's EPS in 2017-2019 (based on the issuance of 40 million new shares) to be 0.40,0.43,0.48 yuan respectively. Taking into account the comparable company's PE level, industry cycle and the company's profit growth, we give the company 25-30 times PE in 2017, and we think the reasonable price for the company is about 10.0-12.0 yuan. According to the way of issuing new shares, the issue price is 8.31 yuan. It is recommended to apply at this price.
Risk hints: medical insurance cost control risk, cooperative mode of production risk, market competition aggravating risk
