Report highlights
Ma Yinglong: An old brand of traditional Chinese medicine
Ma Yinglong Pharmaceutical Group Co., Ltd. (600993.SH) was founded in 1582 AD and is a “Chinese time-honored brand” enterprise that has been in operation for 440 years. The company started with eye drops, owned the famous formula, and later developed a series of star products such as Ma Yinglong hemorrhoid cream. The company's business layout covers the three major sectors of pharmaceutical industry, pharmaceutical commerce, and medical services. The company achieved revenue of 0.955 billion yuan in the first quarter of 2024, an increase of 14.70% year on year, and realized net profit to mother of 0.198 billion yuan, an increase of 5.36% year on year.
Pharmaceutical industry: Hemorrhoid cream is growing steadily, and the big health business is developing rapidly. As a common anorectal disease, hemorrhoids are characterized by high incidence and difficulty in curing. As the number of drug users increases, the size of the hemorrhoid medication market is also increasing year by year. In 2021, proprietary Chinese medicines for hemorrhoids accounted for 84.30% of the hemorrhoid medication market, and the traditional Chinese medicine market for hemorrhoids has broad prospects. The company's leading products, Ma Yinglong Musk Hemorrhoid Cream and Musk Hemorrhoid Suppository, occupy a large share of the market due to their brand and price advantages.
At the same time, the company actively optimizes channels, cleans up inventory, and enhances operating capacity. The company is also actively returning to its roots in eye medicine. In recent years, it has expanded and developed the eye health industry and vigorously developed the eye beauty and health business. The core product of the company's eye drops is Ma Yinglong Babao Eye Ointment. The skin category is centered on Dragon Ball Ointment, which exploits potential, revitalizes existing resources, and continues to develop related products. Gradually, a product pattern with the anus and intestines as the core and ophthalmology and dermatology as the pillars was formed.
Pharmaceutical business: steady development of wholesale and retail
The company's pharmaceutical business includes two major businesses: pharmaceutical retail and pharmaceutical wholesale. Pharmaceutical retail implements a healthy home operation model based on membership management centers, and relies on offline retail pharmacies, and uses online business innovation and development as a platform. The pharmaceutical commercial business is expected to continue to develop steadily and continue to strengthen synergy with the main pharmaceutical industry.
Medical services: Online+offline collaboration to build a large platform for anorectal diagnosis and treatment is an important fulcrum for the company to build an anorectal health solution provider and expand the entire anorectal industry chain based on the core field of anorectal health. Actively develop anorectal specialty hospital chains and diagnosis and treatment centers offline, launch Ma Yinglong Health Cloud Platform “Pony Healthcare” online, and build a full-chain, integrated anorectal diagnosis and treatment platform.
Investment advice and profit forecasting
The company's hemorrhoid products have a strong competitive advantage in the market. In the future, along with the company's channel optimization and product price changes, revenue expectations will grow. Health products have also developed rapidly in recent years. We expect the company's revenue in 2024-2026 to be 3.389/3.651/3.911 billion yuan, net profit to mother of 0.536/0.602/0.695 billion yuan, EPS of 1.24/1.4/1.61 yuan/share, corresponding PE of 20.84/18.58/16.1 times. First coverage, giving a “buy” investment rating.
Risk warning
Industry competition increases risks, risks such as price reductions in national volume procurement, and new business expansion falling short of expectations.