Key points of investment

It is expected to achieve a net profit growth rate of no less than 25% in the first quarter of 2024. During the beginning of 2024, the company's product sales momentum improved, the market showed a strong sales trend, and successfully achieved a “good start”. The company is based on market development in line with expectations, stable development of the traditional Chinese medicine industry, and a stable international trade situation. After preliminary accounting, the company is expected to achieve a year-on-year increase of no less than 25% in net profit attributable to shareholders of listed companies in the first quarter of 2024.

Angong gyuhuang pills have begun to increase, and they are expected to quickly become the next major product company to gradually market and sell Longhui Angong gyuhuang pills. In the first three quarters of 2023, revenue for cardiovascular use (mainly Angong beef yellow pills) reached 240 million yuan, an increase of 79.34% over the previous year. The product is expected to be quickly distributed through the Pianzaihan Experience Center channel.

Profit forecasting and valuation

The estimated 2023-2025 revenue is 100.35/115.89/13.032 billion yuan, up 15.42%/15.49%/12.45% year on year; net profit to mother is 27.84/32.13/ 3.701 billion yuan, up 12.59%/15.42%/15.18% year on year, EPS is 4.61/5.33/6.13 yuan, and corresponding PE is 46.81/40.56/35.21x, respectively. Considering that the company is a leader in the traditional Chinese medicine industry, the core products have the ability to rise rapidly in volume and price, and are less affected by centralized procurement and price reductions, and are given a “buy” rating.

Risk warning

Risk of policy adjustments, risk of cost fluctuations, and cross-regional expansion falling short of expectations