Weixinkang is a leading domestic enterprise in parenteral nutritional medicine. Established in 2006, Weixinkang is deeply involved in the parenteral nutrition circuit. It has significant advantages in the fields of multivitamins, intravenous trace elements, and intravenous electrolytes. The core product, injectable multivitamin (12), maintains a high market share throughout the year. In recent years, the company has continued to increase investment in R&D, adhere to the combination of imitation, and take more measures to enrich the R&D organization through self-development+cooperation+integration. In addition to continuing to improve the variety of multivitamin and trace element products, the company is also expanding new directions such as amino acids, developing parenteral nutritional drugs for children, and speeding up the launch of new products in various segments.

Harvesting and implementation, 12-dimensional adults welcome a new boom cycle. Currently, there are two adult 12-dimensional products on sale in China. According to medical Rubik's Cube data, Weixinkang's adult 12-dimensional market share has maintained about 80% throughout the year, making it the leading adult 12-dimensional product in China. Although it has achieved a high market share in China, the 2017-2020 two-ticket system adjustment had a big impact on its sales. At the same time, for many years, adults had only local health insurance status, and only officially entered national health insurance at the end of 2020. After admission, it was disrupted by the epidemic for another three years. Overall, we believe that the company's adult twelve-dimensional clinical promotion and penetration in China is insufficient, and there is still a very broad market space.

As of now, in 2023, Henan's 19 provincial alliance collection was fully implemented. Although the price drop was more than 50%, the collection status of the 20 provinces was an excellent opportunity for them to speed up hospital entry and release; secondly, due to the drastic reduction in market investment in the alliance region after collection, the reduction in product costs far exceeds the price drop, driving a significant increase in product gross margin. In the first half of 2024, when some provinces have not yet approved the contract, the company's adult twelve-dimensional sales increased by nearly 20%, gross margin increased 7.6% compared to 23, and service revenue has also resumed growth. It is expected that this trend will be further strengthened after the collection results are fully implemented, thus driving adult twelve-dimensional into a new boom cycle with higher business quality. According to estimates, we expect service revenue to return to the growth channel for the full year of 2024, while revenue is expected to grow by more than 30%.

The new product expands the medication plan to cover the 10 billion potential market for parenteral nutrition. In 2023, the parenteral nutritional drug market in China is about 14.27 billion yuan. As a complete medication treatment plan, parenteral nutrition is a combination of a series of products such as multivitamins, trace elements, electrolytes, amino acids, etc., and the products have strong synergistic effects. After years of research and development, Weixinkang has created an echelon of parenteral nutritional products including complex vitamins, various trace elements, compound electrolytes, and compound amino acids, which can provide comprehensive parenteral nutritional support programs for domestic adult and child patients. Relying on the company's high market position and strong sales channels in the multivitamin field, we believe that the company is also expected to cultivate large varieties such as the twelve dimensions of adults in the fields of various trace elements, compound electrolytes, compound amino acids, etc., making revenue more diversified and driving the company's continuous growth in performance.

Investment advice: Weixinkang is a leading enterprise in the field of parenteral nutritional medication in China. The core product adult 12 dimensional has entered a new boom cycle of high quality growth. The new product 13 3D, Duowei has good dosage potential and is expected to reverse performance in the short term. At the same time, the company continues to enrich its product pipeline, and is expected to grow from a leading multivitamin single product to a supplier of full medication solutions in the field of parenteral nutrition, and has good growth potential in the medium to long term. We expect the company's net profit to be 2.83, 3.48, and 432 million yuan respectively in 2024-2026, up 32.4%, 22.9%, and 24.2% year-on-year. The current stock price corresponds to PE 16, 13, and 10 times, respectively. According to comparable company valuations, we gave the company 20 times PE in 2025, corresponding to a stock price of 16.0 yuan, covered for the first time, and gave it a “strong” rating.

Risk warning: Procurement execution has increased; product competition has deteriorated; health insurance cost control has increased.