Key points of investment
A comprehensive chemical preparation manufacturer with a full range of products. The company specializes in R&D, production and sales of chemical formulations, with a wide range of types and coverage. The product indications cover the fields of neurological, cardiovascular, musculoskeletal, systemic anti-infectives, anti-tumor drugs, nutritional supplements, etc. Among them, 146 product regulations are included in the national medical insurance catalogue (64 in category A, 82 in category B), 43 product regulations were included in the “National Essential Drug Catalogue”, with 81 product regulations; it also entered the medical device field in 2016. At present, the company has obtained second-class medical device production additives and wound care materials. License, mainly The product is a medical sodium hyaluronate repair patch.
The market for neurological drugs and cardiovascular drugs continues to grow steadily. As the pace of life of residents accelerates, pressure increases, and lifestyle changes such as environmental deterioration, oil and fat, etc., the incidence of neurological diseases and cardiovascular diseases in China continues to rise. In 2015, neurological drugs and cardiovascular drugs ranked 6th and 5th in the market share of terminal chemicals in public hospitals in sample cities across the country, and as the degree of population aging deepens, the market for these two types of drugs will continue to grow steadily.
Valuation and investment advice: We expect the company's 2017-2019 EPS (calculated based on issuing 52.7667 million new shares) to be: 0.88, 0.94, and 1.02 yuan respectively. Considering the comparable company's PE level, industry cycle and the company's profit growth, the company was given 25-30 times PE in 2017. We think the company's reasonable price is around 22.0-26.4 yuan. According to this IPO method, the issue price is 18.07 yuan. It is recommended to purchase at this price.
Risk warning: risk of price reduction in tenders, risk of business cooperation, risk of high product concentration