Introduction to this report:
It is proposed to expand production capacity and marketing service capacity through fixed increases, and future performance is expected to grow rapidly. With the support of Enlightenment's strong resources and capabilities, the expansion of technology+big health can be expected. The first coverage was given to the increase in holdings rating, with a target price of 29 yuan.
Key points of investment:
The first coverage gave a rating for increasing holdings, with a target price of 29 yuan. The 2016-2018 EPS is expected to be 0.18/0.28/0.44 yuan. Based on the two valuation methods of PE and PEG, the company was given a target price of 29 yuan, corresponding to 160 times PE in 2016, covering the “increase in holdings” rating for the first time.
Production capacity has increased across the board, and performance has reached an inflection point. In 2013-2014, the company lost 2 years of performance. In 2015, the second pharmaceutical plant successfully passed the GMP transformation and put into operation, and the revenue of proprietary Chinese medicine products increased significantly compared to the same period last year. In 2015, the company achieved total operating income of 295 million yuan, an increase of 45.09% over the previous year; net profit attributable to shareholders of listed companies was 22.3723 million yuan, turning a loss into a profit. Against the backdrop of continuous increases in production capacity and marketing capabilities, the company's performance is expected to continue to grow rapidly.
Social health issues have been highlighted, and demand in the OTC market is rising rapidly. The increase in the elderly population, the increase in life expectancy per capita, and the increasing prevalence of sub-health phenomena have contributed to the gradual increase in health awareness among Chinese residents. Consumers' understanding of health has changed from passive treatment to active prevention and treatment. Benefiting from the rising prosperity of the industry, the company's future prospects are promising.
With the support of inspiring strong resources and capabilities, the expansion of technology+big health can be expected. Tsinghua and Enlightenment have abundant resources in the Internet industry. With the continuous penetration of the Internet into the big health industry, as the only listed pharmaceutical company in Tsinghua, the company is expected to usher in asset injections of the Internet and technology attributes, or achieve further upgrading of the traditional medicine industry through outreach mergers and acquisitions. At the same time, with reference to Enlightenment Technology's transfer of some of its shares and future fixed subscription prices, we believe that the company's current stock price has a high margin of safety.
Risk warning: policy risk; construction progress of new production capacity and marketing system falls short of expectations
