CONBA(SH:600572) Soochow Securities·2024-08-11 15:07Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [3]. Core Insights - The company has been integrated into the state-owned system, focusing on its main business and actively promoting mixed ownership reform, which has led to a significant improvement in its operational efficiency and financial performance [2][18]. - In 2023, the company achieved a revenue of 6.733 billion yuan, representing a year-on-year growth of 12.21%, and a net profit attributable to shareholders of 591.57 million yuan, up 65.19% from the previous year [2][28]. - The company is enhancing its brand and product portfolio, with 17 product series generating over 100 million yuan in sales each, indicating strong market demand and growth potential [2][34]. Summary by Sections 1. State-Owned Integration and Focus on Traditional Chinese Medicine - The company was officially integrated into the provincial state-owned trade system in July 2020, transitioning from private to state control, which has facilitated resource integration and a focus on its core business [18]. - The mixed ownership reform has been implemented, binding core talents through stock incentives, which has improved governance and operational efficiency [22][28]. 2. Continuous Development of Major Brands and Product Categories - The company has established a robust product structure centered on traditional Chinese medicine, with significant contributions from specialty chemical drugs and health consumer products [34]. - In 2023, the full range of traditional Chinese medicine products generated 3.625 billion yuan in revenue, accounting for 54.49% of total revenue, with a year-on-year growth of 16.60% [35]. 3. Research and Development Enhancements - The company is advancing its prescription drug products, which are expected to bring performance elasticity, particularly with the anticipated adjustments in the national essential drug list [2][3]. - New product developments include innovative traditional Chinese medicine formulations that have been included in the national medical insurance directory, indicating a strong pipeline for future growth [2][3]. 4. Financial Forecast and Valuation - The company is projected to achieve net profits of 707.64 million yuan, 808.02 million yuan, and 919.09 million yuan for the years 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 15.98, 13.99, and 12.30 [3][5].