Key points of investment:
Deep-rooted in pediatric OTC brands, large single product Longmu Zhuang bone pellets. 1) In 2022, OTC pediatric proprietary Chinese medicines had the highest market share and strong market competitiveness. 2) Longmu Bone Granules are suitable for a wide range of people and mainly promote a broad market for children. 3) The company's sales strategy is optimized, and the high-margin structure will continue to be optimized in favor of a high-profit 60 bags/box specification. 4) Lifting the scope of medical insurance payments is expected to open up the in-hospital market, increase patients' willingness to buy for the first time, and bring new catalytic factors to the company's performance growth.
The double span variety is based on an inclination from inside to outside the hospital. 1) Pediatrics: Consolidate the traditional advantages of pediatric OTC variety Longmuzhuang bone granules to create a cluster of pediatric cold products. The main varieties of the company's pediatric RX are: pediatric pulmonary and cough relief granules, pediatric Baotaikang granules, pediatric desensitizing granules, etc., which focus on the broad market in hospitals. 2) Featured traditional Chinese medicine: Exclusive varieties such as Benitong capsules are actively exploring the out-of-hospital market. Qirui Weishu capsules are a Class 1.1 innovative traditional Chinese medicine newly marketed by the company. The dosage is relatively fast after receiving medical insurance. 3) Gynecology: Mainly key varieties such as spleen strengthening blood tablets, and Xiaojin capsules, etc., with sales reaching 573 million yuan in 2023.
Relying on the exclusive business of Jianmin Dapeng Tipei Niuhuang, the company continued to increase its performance. 1) The price of natural beef yolk continues to rise, and supply is in short supply. The price of cultured beef yolk is low, similar in function to natural beef yolk, and the quality is stable. The production cycle is short and demand is strong. 2) Jianmin Dapeng is an exclusive manufacturer of sports beef and Jianmin Group has a stable shareholding ratio. The beef-training business continues to grow in profits for the company.
Profit forecast and investment advice: Jianmin Group is based in the field of proprietary Chinese medicine, with pediatric medicine as the main focus, and is jointly driven by gynecology and specialty traditional Chinese medicine. At the same time, the subsidiary Jianmin Dapeng's sports training beef and yellow business continued to inject increased performance into the company. We forecast that in 2024/2025/2026, the company's revenue will be 48.7/56.55 billion yuan, respectively, with a growth rate of 16%/16%/16%. In 2024/2025/2026, the company's net profit was 6.3/7.6/910 million yuan, respectively, with a growth rate of 22%/21%/19%. We are optimistic about the brand competitive advantage of the company's products. Coupled with the exclusive status of sports training, the company was given 20 times PE in 2024. The target price was 82.9 yuan, which covered the first time, and gave it a “buy” rating.
Risk warning: Sales of major products fall short of expectations; Jianmin Dapeng Tipei's beef yellow business falls short of expectations; risk of policy fluctuations; risk of price fluctuations in raw materials and herbal medicines.