Event: on February 14, 2023, Taienkang announced that it intends to use its own capital of 200 million yuan to acquire 50% of the shares held by Baijiahui. After the completion of the transaction, Bochuangyuan will become a holding subsidiary of the company and will be included in the scope of the company's consolidated statements.

Proposed acquisition of Bochuangyuan, layout of innovative drugs. Bochuangyuan 2022 net profit-11.12 million yuan, the company was established in 2011, founded by Professor Wang Honglin (National Jieqing Fund), mainly engaged in innovative drug research and development and industrialization. The product pipeline involves skin diseases (immune, inflammatory and infectious skin diseases, etc.) and non-skin autoimmune diseases (rheumatoid arthritis, multiple sclerosis, inflammatory bowel disease, etc.).

The modification of frankincense natural products has been patented. CKBA is a FIC drug molecule modified by Wang Honglin's team based on the structure of acetyl-11-keto-β-lactic acid (AKBA), a natural product in frankincense. It has applied for Chinese and PCT patents and has been authorized.

CKBA has novel targets, inhibits the effect of CD8+T cells, and lays out vitiligo and psoriasis. CKBA regulates lipid metabolism and inhibits the effect of CD8+T cells by targeting ACC1 and MFE2. 1) the CKBA ointment for psoriasis treatment project is conducting a multicenter, IIa phase clinical study led by the people's Hospital of Peking University (clinical trial leader). 2) the study of new indications for vitiligo is planned.

Investment advice: the company has a wide range of business contacts, agent products and self-produced bisexual health drugs contribute greatly to profits and continue to be good. It is expected that the company's gross profit margin will remain good in the future. Sales of core products such as dapoxetine, tadalafil and Weizhengchang pills have increased rapidly. We expect the net profit of homing in 2022-2024 to be 100 million yuan in 2-3-4 and PE times that in 48-30-22, maintaining the "recommended" rating.

Risk hint: uncertainty of R & D progress; operational risk of agency business; policy risk