1, the company's business profile: the company mainly acts as a famous brand medicine and health care brand, and distributes products covering 10 categories and 60 kinds of products, including cough relieving and phlegm relieving products: Kyoto Nien Cian Mi Lian Chuanbei Loquat Ointment and Loquat Sugar; external liniment oils: Feiying Huoluo Oil and Jinhuo Yima Dazheng Safflower Oil; Cardiac and Cerebrovascular products: Jiuxin Pill; Gastrointestinal Class: trumpet Brand is dew Pill; vitamins: lovely liver Oil Pill series and so on. The company has a huge sales network, with nearly 1000 distributor customers at all levels, covering more than 70, 000 retail stores and setting up more than 2500 product counters in 12 provinces.
2. The company's main products: Kyoto Nien Cian Chuanbei loquat ointment (accounting for more than 95% of China's imported cough market) and Kyoto Nien Cian Chuanbei loquat sugar are the company's main pillar products. Its future gross profit margin may rise with the appreciation of RMB, and the management of the company is also actively discussing with the medical administration the possibility and space of raising the price of Nianci Chuanbei loquat paste in the future.
Feiying Huoluo oil and Jinhuo Yima Dazheng safflower oil are the company's high gross profit (gross profit can reach 60%) products and the best-selling, most potential for growth products, but also the company's main products in the future.
3. The company's latest business developments: the company has introduced two series of new health food products from the United States: BRAINSTRONG (currently DHA has a 75% market share in infant formula and 96% in the United States) and CULTURELLE (the leading brand in the American probiotic supplement market and the first brand of child probiotics recommended by American pediatricians).
In addition, the company actively introduces e-commerce sales platform to sell a wide variety of products online, and the company is expected to invest certain resources in the equity investment of well-known e-commerce, so as to establish and improve the company's online and offline sales business. and form a good sales interaction and promote each other.
4. The company's future mergers and acquisitions: the company has been actively seeking good targets for inter-industry mergers and acquisitions, and the last acquisition failed because the financial situation of the target company was not clear enough. in line with the attitude of being responsible to the company's investors, the company finally terminated the last merger and acquisition. At present, the company is negotiating several target companies, all of which are considered by senior executives to have investment value, and the dynamic PE is no more than 10 times good targets. It is expected that the first target company merger and acquisition can be completed in the near future.
5. Future financing plan: the company's current cash flow is sufficient to support the merger and acquisition of the first target company. If there are further extension acquisitions in the future, we do not rule out financing arrangements in the future.
6. The company's sales network: at present, the company has 230 first-class distributors, 668 secondary distributors and 600 potential distribution customers, 2518 product cabinets, a total of more than 70, 000 retail stores. The company relies on a strong distribution network to effectively control the downstream business, but also for the future development of e-commerce online business logistics and distribution links to provide a strong guarantee.
7. Our suggestion: we expect the company's performance in 2013 to be the same as in 2012, with a static PE of 40 times. There is no way to quantify the 2014 performance. Considering that the company has risen from HK $0.95 to HK $3.60 in just three weeks, investors are advised to actively follow the company's M & A process and participate cautiously.