Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) (603896)
A century old Chinese brand, build the first brand of organic Chinese medicine, cover it for the first time, and give a "buy" rating
Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) was established in 1997. The brand " Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) " has been inherited and developed for hundreds of years. It is a national high-tech enterprise specializing in the variety breeding, cultivation, processing and sales of rare Chinese medicinal materials such as Ganoderma lucidum and Dendrobium candidum. Its core products are Ganoderma lucidum spore powder series and Dendrobium candidum series products. The products have the core advantages of seed source, cultivation and processing: in terms of seed source, the company independently selects nine high-quality seed sources with independent intellectual property rights, and the content of breeding active ingredients is high, which casts a moat for the company. In terms of cultivation, the company ensures the high quality of medicinal materials by imitating wild organic cultivation, and uses Internet of things technology to realize the whole process traceability of planting. In terms of processing, the supersonic air flow wall breaking technology independently developed by the company significantly improves the product safety, and the original wall removal purification technology improves the content of active ingredients by more than 8 times, with a long patent protection period. The company's products have clinical value and there is a large growth space to expand the market outside the province in the future. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 203, 264 and 345 million yuan respectively, and the corresponding EPS will be 1.33, 1.74 and 2.26 yuan / share respectively. The corresponding PE of the current stock price is 46.5, 35.7 and 27.4 times respectively. Compared with similar traditional Chinese medicine companies, the valuation has cost performance and is given a "buy" rating.
The company's products are rich in categories and cost-effective. It has increased R & D and excavated clinical value
In terms of products, the company's Ganoderma lucidum spore powder series products have rich dosage forms and specifications, and have cost performance considering the effective ingredients; At the same time, the company has obvious geographical advantages of Dendrobium candidum planting. In terms of scientific research, the company consolidated its leading position in R & D by establishing academician and expert stations and industry university research platforms, and formulated a number of industry standards at home and abroad. The company's products also have clinical value. Through a series of studies, it is found that Ganoderma lucidum spore powder has clinical value in preventing or delaying cardiovascular disease, sub-health insomnia and enhancing cellular immune function.
Tablet dosage forms improve customer experience, carry out distribution channel reform and promote national layout
The company's traditional sales areas are concentrated in Zhejiang Province, the proportion of revenue in Zhejiang province remains above 60%, and there is still room for expansion in the provincial market. In the market outside the province, the company carried out marketing reform outside the province in 2020: first, the company promoted tablet products in the market outside the province, avoided the disadvantages of inconvenient carrying and use of powder, and improved the use experience (less bitterness); Second, the company has gradually transformed the self operated mode outside the province into the distribution mode. Through the dealers having rich marketing experience in the local area, the promotion effect is more effective. Marketing reform is expected to solve the pain points of development outside the province and give it growth power.
Risk tip: the promotion outside the province is not as expected.
