Incidents:

On March 11, 2024, the company issued an announcement that the company's atropine sulphate eye drops met the relevant requirements for drug registration and obtained a drug registration certificate.

The major variety of low concentration atropine was successfully approved, and we look forward to its rapid sales volume:

The company's major variety of low-concentration atropine was successfully approved. Considering multi-dimensional factors such as its sales space, competitive pattern, and the company's sales capacity, we believe that it is worth looking forward to the rapid sales volume of this variety in the future. Among them, in terms of sales space, the product is mainly used to slow the progression of myopia among children aged 6 to 12. According to data released by the National Health and Health Commission, the myopia rate of children and adolescents nationwide reached 53.6% in 2022, and there is plenty of room for promotion of this variety; in terms of competitive landscape, similar products with no relevant indications are available domestically, which helps the company to quickly sell this variety in the short term; in terms of sales and promotion capabilities, the company has professional and strong academic promotion capabilities in the field of ophthalmology. Every year, it regularly attends nearly 100 international and national academic promotion activities, covering nearly 100 professional academic promotion activities, covering doctors 10,000 people. Strong promotion capabilities have laid a solid foundation for the rapid release of low concentrations of atropine.

Investment advice:

The profit forecast in the relevant report released previously did not take into account the contribution brought by the official launch and sale of low-concentration atropine. Currently, low-concentration atropine has been successfully approved, and it is expected that its official sales will contribute significantly to the company's performance. Therefore, we have readjusted the company's profit forecast. The company's net profit from 2023 to 2025 is expected to be 260 million yuan, 535 million yuan, and 614 million yuan respectively, up 22.9%, 105.6%, and 14.8% year-on-year respectively; EPS is expected to be 4.29 yuan/share in 2024, taking into account the low concentration of atopin The product brought significant growth to the company's performance. It was given 50 times the current PE, and the corresponding 6-month target price was 214.50 yuan/share, giving it a buy-A investment rating.

Risk warning: the risk of drug price reduction; sales of core products falling short of expectations; risk of worsening of the competitive pattern of core products, etc.