Key points of investment

Recently, the company released its 2019 quarterly report. The company achieved operating income of 297 million yuan, an increase of 39.64% over the previous year; net profit attributable to shareholders of the parent company was 70.72 million yuan, an increase of 2.99% over the previous year.

Net profit not attributable to shareholders of listed companies was 70.73 million yuan, an increase of 66.7% over the previous year. The growth rate without deductions was faster than net profit growth mainly due to the receipt of 28.87 million in government subsidies in the same period last year.

Profit forecast: We are optimistic that the new active drug will enter the new medical insurance catalogue. It is expected to be released rapidly in the next three years, driving the company's rapid development. We expect the company's EPS for 2019-2021 to be 1.99, 2.60, and 3.28 yuan respectively, corresponding to the closing price of PE on April 25, 19, 14, 11 times, respectively.

Risk warning: The promotion of the new drug did not meet expectations; Imdo's sales did not meet expectations; performance did not meet expectations.