The acceleration of aging and the increase in per capita disposable income have contributed to the sustained growth of the domestic dietary supplement market: according to the China Business Industrial Research Institute, the market size of China's dietary supplement industry has increased from 74.31 billion yuan in 2010 to 193.8 billion yuan in 2020, with an average annual compound growth rate of more than 10%. With the acceleration of aging, the enhancement of public health awareness and the growth of per capita disposable income, the increase in national consumption on dietary supplements will lead to the continuous expansion of the market scale. According to WHO, China's population over the age of 60 will reach 35% by 2050. As the largest consumer group of medical and health products, the increase in the proportion of this group will promote the continuous expansion of health care demand, and the disposable income of domestic residents will also continue to rise, laying a material foundation for the growing health care demand. In addition, the per capita consumption of dietary supplements in China in 2022 is only US $22, which is the same as that of the United States, and there is a higher room for improvement (data from Tomson Bei Jian's 2022 annual report).

Brand advantage superimposes channel resources, 21 gold vitamins product matrix brings new growth: the company focuses on the field of vitamin and mineral supplements, and its main product 21 gold vitamin multi-dimensional element tablets (21) has been ploughing the domestic market for many years, accumulated high brand recognition and product recognition, and won the fifth place in the comprehensive statistical ranking of over-the-counter products in China in 2021. At the same time, the company has a perfect channel system to enable products to reach end consumers quickly and accurately: 1) offline channels to establish a pattern dominated by East China with full coverage in other areas of the country; 2) in the field of new channels, increase investment in online platforms such as BABA and JD.com, cross-border marketing with emerging economies such as XIAOMI Group, and improve the accuracy of reaching consumers. Based on the company's unique brand and channel advantages, the company provides more subdivided and more accurate mineral products to meet the diversified needs of people of different ages, forming a 21 gold vita product matrix. In addition, the company has also laid out a series of probiotic products, as well as other products under research, and the product echelon is gradually growing.

Fund-raising projects: focus on the main industry, increase production capacity to cope with the improvement of medium-and short-term business volume, strengthen R & D and innovation capabilities to enhance long-term competitiveness. The company intends to issue no more than 89.1386 million RMB common shares (A shares) to the public this time. After deducting the issuance cost, the company intends to invest in the following projects: 1) the technical renovation project of the intelligent production line of Uygur and mineral OTC products, which aims to break through the production bottleneck and expand the production capacity. 2) the technical transformation project of the intelligent health food production line aims to further enrich the product category and achieve wider channel and crowd coverage based on the common key technology system, and 3) the technical transformation project of the people's livelihood and Health Research and Development Center, the aim is to comprehensively enhance the company's R & D strength and promote the company's sustainable development.

Investment suggestion: the reasonable market capitalization range of the company 6-12 months after listing is 23.90-2.811 billion yuan. We estimate that the net profit of the company from 2023 to 2025 will be 0.92,1.09 and 128 million yuan. Based on the discounted valuation of cash flow and the price-to-earnings ratio of comparable companies, we estimate that the overall long-term fair value range of the company 6-12 months after issuing shares is 23.90-2.811 billion yuan, corresponding to the value range of 6.70-7.88 yuan per share. The market capitalization corresponds to a price-to-earnings ratio of 34.00-39.99 times PE for 2022 net profit, 30.26-35.59 times PE for 2022 net profit, and 25.98-30.55 times PE for 2023.

Risk hint: the risk that the profit forecast assumption is not established affects the profit forecast and valuation conclusion, the risk of intensified competition, the risk of examination and approval of OTC drugs under study, the risk that the promotion of new products is not as expected, the risk of raw material supply and price fluctuation.