CR Sanjiu(SZ:000999) Guoxin Securities·2024-09-02 06:03Investment Rating - The investment rating for the company is "Outperform the Market" [3][15]. Core Views - The company has shown steady growth in both revenue and profit in the first half of 2024, with revenue reaching 14.106 billion yuan (+7.3%) and net profit attributable to shareholders at 2.398 billion yuan (+27.8%) [4][9]. - The company is focusing on enhancing its R&D capabilities and expanding its traditional Chinese medicine (TCM) full industry chain layout, which is expected to support stable growth in the future [15]. - The strong performance in the CHC (Consumer Health Care) segment contrasts with the pressure faced in the prescription drug business, indicating a mixed performance across different business units [12][15]. Financial Performance - In H1 2024, the company achieved a revenue of 14.106 billion yuan, with a net profit of 2.398 billion yuan, reflecting a significant increase in profitability [4][9]. - The sales gross margin improved to 53.6% (+1.3 percentage points), while the net profit margin increased to 18.3% (+2.6 percentage points) [9][12]. - The CHC business generated revenue of 7.773 billion yuan (+14.0%), while the prescription drug segment saw a decline in revenue to 2.417 billion yuan (-13.1%) [12][15]. R&D and Innovation - The company has increased its R&D investment to 392 million yuan (+7.3%) in H1 2024, focusing on key medical areas such as oncology and orthopedics [12][15]. - The company has received drug registration certificates for two new products and has made significant advancements in TCM innovation, evidenced by awards for its ecological planting project [12][15]. Strategic Developments - Following the acquisition of Kunming Pharmaceutical Group, the company is deepening its integration with Kunming, launching new brands to enhance market recognition [12][15]. - The company announced plans to acquire a 28% stake in Tianjin Tianshi Group, which is expected to strengthen its capabilities in the TCM innovation sector [12][15]. Profit Forecast - The company maintains its profit forecasts for 2024-2026, expecting net profits of 3.312 billion yuan, 3.942 billion yuan, and 4.567 billion yuan, representing year-on-year growth rates of 16.11%, 19.02%, and 15.83% respectively [15].