Category: Money Tips Date: 2007-02-20
We will report the depth of the subsequent more detailed analysis of the company's situation, including specific profit forecasts, follow-up possible effects of the integration of the company and our current research in Guangdong Tempe, so stay tuned.
On the road to real growth of Chinese medicine: from textiles to medicine changes. We are right on the real history of the development of Chinese medicine was in order, sought to clarify its development for investors over the years.
To sum up, the real development of Chinese medicine has undergone several important stages:
The first phase (1981 -1996 years): The company of textile-based industry can be traced back as early as 1981, Shanghai Joint Wool Textile Co., Ltd., the company was the first joint venture in Shanghai. By the time the impact of the textile industry downturn, the company's operating performance is not satisfactory. In order to reverse the adverse situation on the business, the company gradually increased its investment in the field of trade and real estate to the integrated business model changes, but the situation is not satisfactory.
The second phase (1997 -2,002 years): the real Group became the controlling shareholder of the company. In the next few years through a series of adjustments, the company gradually entered the pharmaceutical industry, pharmaceutical industry in the main a gradual increase in the proportion of income.
The third phase (2003 - today): the company's pharmaceutical industry began to consolidate, and this integration is the whole group in the pharmaceutical industry against the background of integration simultaneously.
Since 2003, the Group decided to start on the actual medical industry restructuring, the measures include: the privatization of medical technology on the real (8018.HK), the establishment of the Ministry of the pharmaceutical industry, etc.; in February 2005 on a false group announced the formation of plate pharmaceutical industry, the establishment of a unified platform for pharmaceutical investment and operation and implement the corresponding assets and business integration.
Chinese medicine is one of the Group's three key industries, while the real integration of Chinese medicine has become the Group's pharmaceutical industry, a platform in November 2006 the company changed its name to "the real medicine."
The company has a wealth of medical assets. Pharmaceutical company's existing assets, mainly in the chemical pharmaceutical, biopharmaceutical and medical device fields. The existing assets, we recommend investors to focus on ordinary shares and the Guangdong Pharmaceutical Tempe.
Chang steady growth in drug shares. Shares under the jurisdiction of regular drug Pharmaceutical Co., Ltd., Changzhou, Changzhou Pharmaceutical Chain Co., Ltd. Life days, Changzhou 9 Asahi Medical Equipment Co., Ltd. and other enterprises, formerly founded in 1954, Changzhou, Jiangsu Province, pharmaceutical medicine company. Changzhou Pharmaceutical Factory is always a drug which shares the most important source of profit, key products, often drug antihypertensive tablets, compound buck films, such as captopril tablets sales now account for a significant share of the market, the company's raw material drugs (doxycycline and hydrochlorothiazide ) in exports also have certain advantages. Often drug shares as an old enterprise, large capital expenditure has been very little net profit to maintain a fast growth (from 1999 to 2005, net profit growth of about 4 times), is expected to remain for at least the next three years 15 -20% growth rate.
Guangdong Tempe are currently being marketed to Ulinastatin mainly a class of drugs the country has the outbreak of the potential Kai Li Kang. Guangdong Temple was founded in 1993, is by the company president, Mr. Fu and light hand-established businesses, in 2004 the real medicine to become the largest shareholder of Guangdong, Tempe, in 2006 after the capital increase by the end of the direct and indirect holding in Guangdong 51% stake in Tempe. Guangdong, Tempe is the current domestic production of protein products in human urine, one of the largest manufacturers, the existing main products include a class of drugs Kai Li Kang, second-class medicine Ulinastatin as well as some export bulk drugs and so on. Ulinastatin in 1999 exclusively in the domestic market, 160 million yuan sales revenue in 2006, is currently in Guangdong Tempe major source of revenue and profit. Kai Li Kang (indications for light - moderate acute thrombotic cerebral infarction) in October 2005 made the country a class of new drug certificate and production certificate in 2006 the company carried out a detailed initial promotional efforts, sales income of more than 1000 yuan. So far, Kai Li Kang has entered the 110 the top three hospitals. And Guangdong, according to a recent Tempe executives in-depth communication, we have Kai Li Kang optimistic about market prospects. We judge the product in 2007 will have a more substantial growth, while in 2008 might have explosive growth. 2007, on all aspects of real medicine will also promote the development of Guangdong, Tempe.
Currently the most important source of profit remains a Lianhua Supermarket return on investment. Medicine on the real business network through a wholly-owned subsidiary of Lianhua Supermarket Company holds 21.17% stake in investment income in 2005 was 47.97 million yuan, accounting for 43.48% of net profit. In 2005 the company had plans to Lianhua Supermarket Holdings of equity and the real medical assets replacement, but in the end the Ministry of Commerce due to various considerations not approved the program. From the trend point of view, we judge Lianhua Supermarket will be set out on the real medicine, but only if there is a considerable asset into medicine. In addition, shares of medical equipment, and often drug shares, as well as Guangdong Tempe also a greater contribution to net profit.
The company's future development strategy of the group's assets, an integrated platform for medicine. We have in the industry report that 2007 will be the consolidation and reorganization of the pharmaceutical industry for an investment opportunity, especially those with a strong background in large state-owned shareholders of listed companies should focus on. On the real medicine is on the real Sun Group company, the Group is a real window of the Shanghai government enterprises, the future development ideas will also be a combination of capital markets become bigger and stronger focus on business. Pharmaceutical industry in the whole group integration background, we judge the real integration of pharmaceutical medicine will be the Group's assets, platforms, in 2007 this rate will further be enhanced. Our basis for judging are: (1)
Regulatory levels of analysis: tradable after the Shanghai SASAC for the development of enterprises under the idea is compartmentalization of resources in accordance with industry consolidation and restructuring of the real groups in the field of medicine has certain advantages. (2) on the real group-level analysis: real estate, medicine, and international trade is the Group's three major industries, from the various groups over the past few years, the practice of view, the real medicine is no doubt become the Group's assets, an integrated platform for medicine. Fully tradable after the group should be more on the real driving force to promote the integration process.
Earnings forecasts and investment advice. Accordance with the terms of existing assets, our initial prediction on the performance of the 2006-2008 real medicine were 0.32 yuan, 0.36 yuan and 0.42 yuan (do not rule out the report in depth may be adjusted). Corresponding to yesterday's closing price (10.74 yuan), predicted price-earnings ratio of 33.56 times, respectively, 29.83 percent and 25.57-fold, in the current price that has some support. Taking into account the strategic position of the future of real medicine, real medicine, we raise the rating to "buy."
The major uncertainties. (1) The integration process will take time, and its process and the specific ways there may be uncertainties, we hope that investors will form a rational expectations. (2) For investment holding companies to track performance more difficult.
