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华润三九
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医药生物
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2015-08-31
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24.25
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24.26
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26.72%
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26.89
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9.35% |
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28.32
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16.78% |
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详细
Q215 earnings miss consensus. 2Q15 earnings was up8% y-o-y to Rmb288m, 8% below consensus estimates. We believe this is due to sales growth slowdown. Publichospitals’ cost control and decrease of drug store numbersresulting from industry consolidation should have impactedthe sales generated from these two channels. Thus, the yo-y sales growth of the company slowed down from 8% in1Q to 4% in 2Q. With net cash of Rmb1.1bn (Jun-15), thecompany's balance sheet remained strong. But CCMG and margin expansion can drive stablegrowth ahead. Total earnings in 1H15 was Rmb627m. Webelieve the company can achieve our earnings estimates ofRmb1.19bn for 15F and earnings growth of 12%/12% in16F/17F, thanks to: 1) CCMG business is projected to makeup 11-16% of the company’s revenue in 15F-17F. Due tosubstantial increase of production capacity and strongdemand, we forecast the sales of this segment to grow by50%/30%/30% in 15F/16F/17F. As CCMG is a moreprofitable product for the company, increasing contributionfrom CCMG will help to expand its net margin from 14.2%in 2014 to 15.4% in 2017F; 2) thanks to persistent effortsto control cost, operating cost % (distribution + admin +others) in sales has dropped by 0.7ppt y-o-y in 2Q15. Webelieve this trend will continue and the ratio will drop from45% in 2014 to 44% in 2015. Maintain BUY. In view of the stable earnings growthmainly driven by CCMG, we maintain our BUY call with TPunchanged at Rmb36.2 (based on 28x 12-month forwardPE, representing 20% discount to our target PE of CCMGindustry leader China Traditional Chinese Medicine (570HK)).
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