TASLY(SH:600535) HTSC·2024-08-27 06:03Investment Rating - The investment rating for the company is "Buy" with a target price of 17.30 RMB [6][7]. Core Views - The company has demonstrated stable operating performance and maintains a leading position in traditional Chinese medicine. The revenue for 1H24 was reported at 4.37 billion RMB, with a net profit attributable to the parent company of 660 million RMB, reflecting a year-on-year growth of 6% in net profit after excluding non-recurring items [1][2]. Summary by Sections Financial Performance - In 1H24, the company's revenue and net profit showed a year-on-year change of 0% and -6%, respectively, while the net profit after excluding non-recurring items increased by 6%. The revenue for 2Q24 saw a slight increase of 1%, but the net profit decreased by 17% [1][2]. - The company expects net profit attributable to the parent company to grow by 10%, 11%, and 11% in 2024, 2025, and 2026, respectively, reaching 1.18 billion RMB in 2024 [1][5]. Business Segments - Traditional Chinese medicine revenue grew by 4% in 1H24, with specific products like compound Danshen dripping pills and Qi Shen Yi Qi showing single-digit growth. The chemical drug segment saw a 13% increase in revenue, while the biopharmaceutical segment experienced an 8% decline [2][3]. - The company is expected to achieve stable growth in revenue for the year, with significant contributions from various products in the traditional Chinese medicine and chemical drug segments [2]. Research and Development - The company has been actively investing in R&D, with expenses ranging from 600 million to 900 million RMB since 2018, positioning itself among the top three in the traditional Chinese medicine sector. It has a pipeline of twenty innovative traditional Chinese medicine projects, with several expected to submit NDA applications in 2024-2025 [3][4]. Shareholder Changes - The controlling shareholder plans to transfer 28% of its equity to China Resources Sanjiu, which is expected to stabilize the company in the short term and potentially enhance its management and strategic direction in the medium to long term [4][5].