The strategy of "one main body and two wings" opens a new stage of the company's development.
As a traditional Chinese medicine company, essence Pharmaceutical has completed a fixed increase to achieve equity optimization and executive shareholding incentives, and the company has formulated and promoted the "one main and two wings" strategy, that is, "focusing on proprietary Chinese medicine." with characteristic raw materials and pharmaceutical intermediates and new chemical preparations as the two wings, set foot in the biopharmaceutical industry ", outlined the development blueprint for the next decade, endogenesis and extension to promote the development of the company to a new stage.
Traditional Chinese medicine preparation is expected to usher in a second rising period.
The company has many famous varieties of traditional Chinese medicine, such as Wang's Baochi pills and Ji Desheng Snake Medicine, and most of them are exclusive varieties or quasi-exclusive varieties, with a good competition pattern and can often maintain an ideal price system in bidding. The company's main varieties, Wangshi Baochi pills (low-priced drugs, independent pricing) and Ji Desheng Snake tablets, have raised their prices considerably in many provinces that have promoted the bidding, helping to improve sales; at the same time, the company has implemented marketing reform and built a national sales network to preserve quantity, plus increment, which is expected to bring opportunities for the second take-off of traditional Chinese medicine preparations.
Great strides in the business of APIs and intermediates
As an important part and profit source of the "one main body and two wings" strategy, the company gradually realizes the improvement of this section through extension: successively invest in long-term pharmaceutical industry, acquire Dongli enterprise management, and plan to acquire Alpha pharmaceutical industry. In the follow-up, the company will actively integrate the business of raw materials and intermediates, promote the promotion of important varieties such as Atto vastatin and sofeibwe to achieve the renewal of API varieties, and even lay the foundation for the follow-up development of chemical preparations. the company will actively prepare for overseas and domestic certification of relevant qualifications.
Sulfur-free traditional Chinese medicine slices and authentic medicinal materials add highlights
The company invests in Longxi Baohetang and Baohetang (Bozhou) Company to enter the large-scale sulfur-free production project. It is expected to greatly increase the gross profit margin of the company's business of traditional Chinese medicine and prepared pieces of traditional Chinese medicine, thereby improving the overall profitability of the company. At the same time, in order to cooperate with the sulfur-free processing business, the company is also actively carrying out the related business of authentic traditional Chinese medicine, which is expected to become an important profit growth point of the company in the future.
Coverage for the first time, giving a "buy" rating
It is estimated that the EPS from 2016 to 2018 is 0.41,0.56,0.70 yuan respectively (considering Alpha Pharmaceutical preparation EPS0.41, 0.79,1.01 yuan), and the corresponding PE is 59,43,34 times (59,30,24 times). Considering the comprehensive factors of PE and PEG, the purchase rating is given according to the target price of 50-60 times PE in 2017, the target price of 28.15-33.78 and the first target price of 30 yuan.
Risk hint
The marketing reform is lower than expected, the progress of M & An is lower than expected, and the business integration of API intermediates is lower than expected.