Core logic: the main business of ① can be summarized as "steady growth of traditional Chinese medicine business + recovery of chemical medicine business + new life of big health business". The company's main business can release profits sustainably in the future. "steady growth of traditional Chinese medicine business" mainly refers to the steady growth of 15% in the proprietary Chinese medicine plate (among which, Anshen Bunao liquid is expected to maintain single-digit growth in the future; Xiaoer Chaigui antipyretic Oral liquid is expected to maintain 40% growth in 2023 and 20% growth in 24-25 years due to the benefit of epidemic situation + the increase of hospital access and drugstore market development in 23 years. Xuefu Zhuyu Oral liquid is expected to grow by 10%. In addition, the second-line proprietary Chinese medicine varieties + traditional Chinese medicine formula granules grow rapidly, which is expected to contribute new increments to the plate. The "recovery of chemical medicine business" mainly refers to the restorative growth of chemical drugs, which is expected to grow by 50% in 23 years (of which, II for injection is expected to grow by 50%. The driving forces of this kind of growth include the return to normal sales of products, the recovery of prescription volume brought by hospitals not affected by the epidemic, the improvement of sales channels, etc.). "Big Health Business freshman" mainly refers to the rapid growth of health products, which is expected to achieve 50% growth in 23-25 years (the main driving forces include product matrix expansion and e-commerce live broadcast channel assistance). It is expected that the 25-year scale is expected to exceed 1 billion. After the company partnered with Xinxuan Group, an online celebrity live broadcast platform, in September 2022, the overall sales are in a rapid expansion stage, while the subsidiary Health Technology (52% shareholding) strategic investors increase capital and capacity. The sector is expected to maintain rapid growth. The financial aspect of ② can be summarized as "steady progress". The company still maintains its investment in GF Securities Co., LTD. and at the same time expands the investment scope of the health industry with the help of four equity fund companies to contribute to industrial investment and resource integration.
Poor market expectation: the ① market defines the company as a financial stock, ignoring the rhythm of the inflection point of the main business. The ② market is not aware of the follow-up prospects of the large health sector, and the superimposed chemical medicine sector has ushered in a performance inflection point. in addition, the main business profit of 2023Q1 company is about 78 million (the net profit of 2023Q1 is 486 million yuan, the net investment income is 407 million yuan, the main business profit is about 78 million yuan, and the main business net interest rate is about 10%). The ③ market is biased against the northeast enterprises, in fact, the company has been in a state of increasing its holdings in the past 10 years, and the layout of the main business is stable.
Profit forecast: we predict that the company's revenue from 2023 to 2025 will reach 3.442 billion, 4.1 billion and 4.968 billion respectively, corresponding to a year-on-year increase of 20%, 19% and 21%, respectively, and its net profit will be 1.869 billion, 2.112 billion and 2.464 billion respectively, with year-on-year growth of 5%, 13% and 17% respectively. The 2023-2025 PE valuation corresponding to the current share price is 10 times, 9 times and 8 times, respectively. Coverage for the first time, giving the company a "highly recommended" investment rating.
Risk hints: OTC market competition intensifies, e-commerce channel development is less than expected, new product launch progress is not as expected, collection price reduction is more than expected, and financial assets fall more than expected.