\u3000\u3000 Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) (603896)
Policies and regulations comprehensively regulate the health care products market. The report of the 19th National Congress of the Communist Party of China stressed that “we should pay equal attention to both traditional Chinese and Western medicine and inherit and develop the cause of traditional Chinese medicine”. The fracture of traditional Chinese medicine cultural inheritance is gradually being repaired, and traditional Chinese medicine health care products are expected to usher in a new period of development.
Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) inherit a century old brand, focus on the innovative development of “one Zhi, one Dendrobium and one flower”, break through the traditional “enterprise + farmer” mode, build a modern industrial chain integrated traditional Chinese medicine enterprise, and strive to achieve “the first brand of organic traditional Chinese medicine”. From 2016 to 2021, the compound growth rate of revenue was 19.48%, and the compound growth rate of net profit attributable to the parent company was 19.81%. All business indicators of the enterprise were developing well.
The three advantages of provenance breeding, geographical environment and processing technology lay the Centennial brand value of ” Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) “. None of the three advantages is indispensable to build the core moat of the enterprise.
Reform the sales model, based on Zhejiang, and strengthen the penetration of cities in the province; Go to the whole country and introduce franchised dealers outside the province; Internet channels make efforts at multiple points to strengthen the short board of sales, which is expected to usher in a major business inflection point.
Profit forecast and investment rating: it is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 767, 944 and 1184 million, and the net profit attributable to the parent company will be RMB 199, 254 and 327 million, corresponding to PE of 41.26x, 32.43x and 25.19x. Thanks to the gradual repair of the traditional Chinese medicine cultural inheritance fracture, the traditional Chinese medicine health care products industry will usher in a period of high-profile development. The opening of the company’s dealer model outside the province will bring new performance increment. For the first time, it will be rated as “buy”.
Risk tips:
The risk that the production and operation qualification is cancelled, the risk that the policy leads to the loss of part of the product sales market, the risk that the product sales promotion is less than expected, the risk of uncertainty in the development of the company’s second growth curve, the risk that the R & D progress is less than expected, and the fierce peer competition leads to a serious decline in product sales.
