Category: Money Tips Date: 2007-07-11
Company is the largest production enterprises Pieces of Chinese medicine, has become the industry leader and standard-setter. Company's new production capacity is in heavy volume before the start-up period, industry environment and the improvement of logistics and distribution system, pro-competitive advantages. Pieces of Chinese medicine industry is in the certification and standardization stages of development, advantages corporate expansion and mergers and acquisitions market share, there are many Aspect.
Is expected in 2006, 2007 and 2008 sales were 7.89 billion, 1.042 billion and 1,375 billion, net profit was 97.43 million yuan, 132.02 million yuan and 190.78 million yuan, which rose 34.1% year on year, 35.5 % and 44.5%, earnings per share were 0.44 yuan, 0.6 yuan and 0.87 yuan. Pieces in Chinese medicine, taking into account the industry's leading position and good growth prospects, company's current share price of 12.38 yuan, and we recommend giving the company an investment grade, medium-term target price of 16.83 yuan (about the 2007 price-earnings ratio of 28 times), long-term target price of 20.51 yuan.
Species analysis of the company
Company's business can be divided into varieties of chemical drugs sold include (Murray Kang Le, Hong Mei kenosha, Hong Mei Luo-Xin equality), purchased product sales and operating three large pieces of Chinese Herbal Pieces, the former two operations can be found in the relevant reports, this paper analyzes the company Pieces of Chinese medicine business.
Pieces of Chinese medicine business to build the core competitiveness of Chinese Herbal Pieces project is the company to use its own funds in the first half of 2002 voted to build, the project investment scale of 8,000 million, to produce processed products more than 1000 kinds of Chinese Herbal Pieces, design capacity, process water, the average ranking of similar enterprises in the forefront. The company has developed a practical Pieces of Chinese medicine quality standards, accelerating the pace of standardization. â‘?clarity in the standards; â‘?water standards; â‘?color and smell of the standard; â‘?chip type and fragmentation standards; â‘?microscopic inspection standards; â‘?physical and chemical standards for accreditation; â‘?active ingredient content and toxic ingredients in the standard limit; â‘?toxicity and to stimulate the standards; â‘?Pieces of accessories testing standards so strict supervision, and to be film-based standardization, packaging and standardization. For large, medium and small size of three Pieces, Pieces were marked with the name, weight, quality certification, batch number, production date, manufacturer, in order to accept the supervision and inspection. This company is the market leader position in the Chinese Herbal Pieces laid a solid foundation. As product quality is stable, the product in short supply, when the sales income of 20.7 million yuan in 2003, sales tripled, reaching 65.4 million yuan, in 2004 sales revenue of 1.58 billion yuan in 2005 sales of 1.76 billion yuan, the first three quarters of 2006 sales of 177 million. Since the sale of Chinese Herbal Pieces are seasonal, in the second half a good season for the fortification is expected full-year 2006 sales revenue will reach 235 million, product gross margins will also be 03 year of 26.25% to 35%, providing a profit of space accounted for the company's 2 / 3. We expect the business in 2007 to 2008 will usher in a faster growth rate of about 30%.
The company's business in the thriving Chinese Herbal Pieces of the state, industry and company level, are the existence of the phenomenon of species. How to look at Chinese Herbal Pieces growth potential of this business?
1, regional consumption patterns are obvious. Chinese Herbal Pieces country needs more than 30 billion yuan. Pieces demand side, hospitals, pharmaceutical companies and retail markets, including hospitals and pharmaceutical companies each accounted for 40% of sales. Pieces of Chinese medicine in 2004 sales revenue of 18.226 billion yuan of industrial, an increase of 13.56%; to achieve profits of 1.504 billion yuan, an increase of 8.07%. The company's main customers are Chinese Herbal Pieces province's major medical institutions in Guangdong Province in 2004 sales of 1.96 billion Chinese Herbal Pieces (accounting for the proportion of 10%), if the next 2-3 years, the company's sales revenue of 5 billion, will account for target about 50% of the market share, accounting for the national market (excluding pharmaceutical users) of 5%. Higher degree of market concentration field of proprietary Chinese medicines, but currently does not have more than 5% market share of pharmaceutical companies. Therefore, the high sales target is unrealistic. In addition, the company's current sales of the business net profit margin as high as 20%, and gross profit margin as high as 35%, well above the industry average. The business sales channels similar to prescription drugs, but a lack of promotion of academic links to doctors, during which operating expenses means the company's results also have a significant impact.
We believe that the Chinese Herbal Pieces certification and standardization of the industry is at a stage of development, advantages of business expansion and retention of market share often can not have both a higher gross margin, the Government has introduced the Chinese Herbal Pieces limit and the price reduction policy to maintain a high gross profit margin has a large impact on the future of the business company's profit margin trends worthy of attention. But for now, companies need to increase the sales of these products radiating.
2, Chinese Herbal Pieces expansion projects, the benefits of cause for concern. The project means to take additional 6,000 million shares to raise capital, in June 2006 successfully raised 500 million yuan of funds. Company has become the largest manufacturer of Chinese Herbal Pieces become the industry leader and standard-setter. In 2002 the construction of a project invested about 8,000 million, its capacity is currently about 1.5 million; second phase of the project construction period June 2006 to June 2008, its total capacity targets are expected to more than 700 million yuan. Company's current development has entered a new plateau, Chinese Herbal Pieces of the heavy volume will be very crucial.
3, intended to prepare land for the building of traditional Chinese medicine in Hong Kong Logistics bright future. The company plans to invest 350 million yuan expropriation of 700 acres of commercial land, as the company intends to build the logistics of Chinese medicine in Hong Kong prepared to land. Major pharmaceutical company located in the province and the country, one of the top ten Chinese medicinal herbs market locational advantages and favorable conditions, the use of Chinese herbal medicine market, raw material supply, marketing, information, technology and other areas, the project should have broad prospects. On the one hand the appreciation of land space for a larger addition, if the logistics of the traditional Chinese medicine in Hong Kong to achieve efficiency, will drive the sales of Chinese Herbal Pieces region radius.
If the company's production capacity of Chinese Herbal Pieces effective contribution, is expected in 2006, 2007 and 2008 sales were 7.89 billion, 1.042 billion and 1,375 billion, net profit was 97.43 million yuan, 132.02 million yuan and 190.78 million yuan , respectively, year on year growth of 34.1%, 35.5% and 44.5%. Pieces in Chinese medicine, taking into account the industry's leading position and good growth prospects, we give the recommended investment grade, medium-term target price of 16.83 yuan, or about 2007 price-earnings ratio of 28 times.
