CR Sanjiu(SZ:000999) Guotai Junan Securities·2024-08-06 12:31Investment Rating - The report maintains a "Buy" rating for China Resources Sanjiu (华润三九) [4][5] Core Views - The company plans to acquire a 28% stake in Tianjin Tasly Pharmaceutical (天士力), which is expected to enhance its competitive advantage through industrial synergy and innovation in traditional Chinese medicine [4] - The target price has been raised to 62.88 CNY, reflecting a price-to-earnings (PE) ratio of 24x for 2024 [4] Summary by Sections Acquisition Details - The company intends to purchase 418 million shares of Tianjin Tasly at a price of 14.85 CNY per share, totaling approximately 6.212 billion CNY [4] - Post-acquisition, China Resources Sanjiu will become the controlling shareholder of Tianjin Tasly, with a voting rights ratio not exceeding 12.5008% [4] Competitive Advantages - The acquisition is expected to strengthen the company's core competitiveness in two main areas: industrial synergy and innovation [4] - Tianjin Tasly is a leading enterprise in modern traditional Chinese medicine, focusing on cardiovascular, digestive metabolism, and oncology fields, which will complement China Resources Sanjiu's strengths in over-the-counter (OTC) channels [4] Financial Projections - The report forecasts earnings per share (EPS) of 2.62 CNY, 2.92 CNY, and 3.17 CNY for the years 2024, 2025, and 2026 respectively [4][12] - Revenue is projected to grow from 24.739 billion CNY in 2023 to 34.215 billion CNY by 2026, reflecting a compound annual growth rate (CAGR) of approximately 12.8% [12][14] Market Position - The company has a strong brand effect and is expected to leverage Tianjin Tasly's research and development capabilities to enhance its product pipeline [4] - The report highlights that Tianjin Tasly's R&D investment accounted for 17.7% of its pharmaceutical revenue in 2023, indicating a strong commitment to innovation [4]