\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 976 Jianmin Pharmaceutical Group Co.Ltd(600976) )
Key elements of the report:
The company is a “Chinese time-honored brand” enterprise inheriting the history and culture of “Ye Kaitai” for nearly 400 years. Its core business includes pharmaceutical industry and pharmaceutical commerce. Its products focus on Pediatrics, gynecology and characteristic traditional Chinese medicine. The company promotes the continuous growth of performance through the strategy of big brand driven by large single products, the concept of positive innovation and the marketing method of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) combination.
Key investment points:
Big brand strategy and innovation strategy drive the growth of OTC and prescription drugs. 1) Build a gold single product and pay attention to brand building. “Longmu” brand has gradually developed into a strong leading brand of nutritional supplements for Chinese children. In 2020, the company successfully launched Huanxin upgraded Longmu Zhuanggu granules, and in 2021, the company launched Huanxin upgraded Longmu granules through the same model ® Paibiantong capsule and Jianmin Yanhou tablets, under the guidance of Longmu brand, cooperate with the brand marketing matrix to create gold single products; 2) Actively carry out marketing reform, increase advertising, and develop the marketing strategy of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) combination. The company maintained long-term strategic cooperation with many well-known chain pharmacies and actively cooperated with e-commerce platforms. The e-commerce business achieved a year-on-year growth of 177.10% in 2021; 3) Attach importance to the research and development of new drugs. In April 2022, CDE’s official website publicly solicited opinions on the guiding principles for clinical efficacy evaluation of new traditional Chinese medicine for chronic gastritis and the guiding principles for clinical efficacy evaluation of new traditional Chinese medicine for gastroesophageal reflux disease. Benefiting from the policy dividend, qiruiweishu capsule, a new product in the field of chronic gastritis, is expected to usher in a development opportunity in the future.
Take children’s medicine as the core and deeply cultivate large varieties. 1) The company’s deep cultivation in the field of children’s medicine has benefited from the imbalance between supply and demand in the children’s medicine market and top-level policy support. The field of children’s medicine has long-term development potential. 2) The company’s three single products for women and children have excellent product strength: the quality of Longmu Zhuanggu granules is further improved through upgrading, and the pricing power leads to the increase of product volume and price; Xiaojin capsule, a large single product of Gynecology, has benefited from the provincial alliance’s bid for volume procurement, and the hospital’s market share will be further expanded; The product advantages of Jianpi Shengxue granule / tablet have been clinically recognized, and the sales volume has increased steadily; 3) The company actively develops potential single products and creates the second growth curve under the guidance of Longmu brand. Longmu launched in 2021 ® Paibiantong capsule and Jianmin Yanhou tablet, two single products with great exclusive potential, are expected to be sold in large quantities rapidly under the increase of marketing investment and the joint drive of various strategic partners.
Jianmin Dapeng is the exclusive producer of bezoar cultivated in vitro, which increases the investment income of the company. In vitro cultivation of bezoar is the best alternative to natural bezoar, with high access threshold. Jianmin Dapeng has continued to innovate for many years, applied for 48 patents on the basis of the original patents, opened the road of nationalization, and has a solid exclusive position. According to our calculation of the demand for natural bezoar in China (including the export part), under reasonable assumptions, the market space of in vitro cultured bezoar in 2021 is 4530 kg (assuming that the sales of traditional Chinese medicine stores in Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) domestic market account for 50%, the natural bezoar used by Angong Bezoar Pill and Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) use accounts for 70% of the total demand for natural bezoar, and the substitution rate of in vitro cultured bezoar to natural bezoar is 100%), The 5000 kg capacity of Jianmin Dapeng can meet the Chinese market demand calculated under this assumption. In the future, with the increase of sales of relevant Chinese patent medicines, the market demand for in vitro cultivation of bezoar will increase steadily, and Jianmin Dapeng will make a strong sustainable contribution to the company’s revenue.
Profit forecast and investment suggestion: the company focuses on children’s medicine, implements the strategy of big single product driving big brand, and its core products have competitive advantages. In the future, the company will actively layout Wuxi Online Offline Communication Information Technology Co.Ltd(300959) marketing channels. Meanwhile, the joint venture Jianmin Dapeng holds the core patent of in vitro cultivation of bezoar and is the only supplier of in vitro cultivation of bezoar. It is estimated that the revenue in 2022 / 2023 / 2024 will be 3.978 billion yuan / 4.804 billion yuan / 5.790 billion yuan, the corresponding net profit attributable to the parent company will be 390 million yuan / 532 million yuan / 669 million yuan, the corresponding EPS will be 2.54 yuan / share, 3.47 yuan / share and 4.36 yuan / share, and the corresponding PE will be 16.53/12.10/9.63 yuan (corresponding to the closing price of 42 yuan on May 17, 2022). Based on the competitive advantages of the company’s products, the expansion of terminal channels and the sustainability of Jianmin Dapeng’s revenue contribution, it is expected that the company will maintain sustained growth in the future and give a “buy” rating for the first time.
Risk factors: the risk of price fluctuation of raw and auxiliary materials, the risk of R & D failing to meet expectations, the risk of price reduction with concentrated volume, the risk of deterioration of competition pattern, etc
