Management has improved, and the profit of the main business has doubled in 18-20 years. The company released its 19-year annual report. Revenue, net profit attributable to mother and net profit attributable to non-mother were respectively 6.99 billion, 630 million and 600 million, + 10%, + 11% and + 10% year-on-year. After the quick price effect was released in 18 years, sales / sales in 19 years achieved a growth of about 15%, which was the main driver of performance. Due to the impact of the epidemic in the first quarter of 20th, the company' s revenue and profit decreased year-on-year. We judge that the profit of the main business will double in 18-20 years (17-year base).

Substantial changes have taken place in the company recently, and there will be catalysts in the future: 1. Chairman Li President Li is likely to be re-elected, and President Ni will serve as the deputy general manager of a listed company and will be in charge of marketing. In the past three years, many positive policies will be implemented for a long time and resolutely, and the integration of marketing resources is expected to accelerate. After being selected as the " Double Hundred Actions" in 18 and 18, we estimate that the company has completed the reform of professional managers at the end of 19. Basically, they are all professional managers, and their salaries and assessment goals have been significantly improved. 3. Another measure of the " Double Hundred Actions" is the equity incentives of state-owned enterprises. The company has launched an equity incentive plan in October 19th. It seems that the 20-22 year EPS has relatively low growth requirements compared to 18 years, but in fact the relative indicator EPS is absolutely Value ranking / growth ranking (24 similar companies) have higher requirements.
 

At present, Tianjin Pharmaceutical Group' s mixed reform is continuing. We judge that the plan will be introduced in 20 years and will be implemented in 21 years. After the end of the mixed reform of the Pharmaceutical Group, Sino-Singapore Pharmaceutical' s assessment target may be raised to a higher level.

We are optimistic that the valuation of dynamic pe will be repaired above 25x, rising to the valuation center of A-share brand proprietary Chinese medicine. With reference to the historical valuation of traditional Chinese patent medicines such as Pianzihuang, Tongrentang and Dong E-Jiao, we judge that the valuation center of A share brand Chinese patent medicines is around 25x-30x (profit growth rate 10% -15%).

Earnings forecast and investment rating: We expect the net profit to be returned to the mother in 20-22 to be +16% / + 20% / + 20% year-on-year, EPS is 0.94 / 1.12 / 1.34, and the current stock price corresponds to the pe valuation in 20/21 It is about 15x / 13x, optimistic about the company' s future performance and valuation improvement, maintaining the " strongly recommended -A" rating. Risk warning: The product sales did not meet expectations, and the pharmaceutical group' s mixed improvement did not meet expectations.