Hefei Lifeon Pharmaceutical (SZ:003020) Hua Yuan Zheng Quan·2024-10-20 23:30Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for investment [2][4]. Core Insights - The company, Lifan Pharmaceutical, is a leading innovative pharmaceutical enterprise in China, focusing on controlled-release technology and driven by the growth of narcotic and traditional Chinese medicine products [2][4]. - In 2023, the company reported a revenue of 1.901 billion yuan, a year-on-year decline of 26.31%, while achieving a net profit attributable to shareholders of 227 million yuan, a year-on-year increase of 8.33% [2][18]. - The company is expected to see significant growth in its product lines, particularly in the areas of narcotic drugs and traditional Chinese medicine, with key products like Yiqi Hewei Capsule and Getu Tongluo Capsule showing strong sales momentum [2][30][40]. Summary by Sections Company Overview - Lifan Pharmaceutical was established in 2002 and is recognized for its leading controlled-release technology platform in China. The company has been listed on the Shenzhen Stock Exchange since December 2020 and has consistently ranked among the top 100 chemical pharmaceutical companies in China [14][15]. Traditional Chinese Medicine - The company focuses on gastrointestinal and cardiovascular chronic diseases, with unique products like Yiqi Hewei Capsule and Getu Tongluo Capsule driving sales growth. Yiqi Hewei Capsule achieved sales of 280 million yuan in 2023, with a compound annual growth rate (CAGR) of 93% from 2019 to 2023 [31][33]. - Getu Tongluo Capsule, a new traditional Chinese medicine, is positioned in a market with a size of 506 billion yuan for cardiovascular oral traditional Chinese medicine, where it holds a market share of 1% [40][41]. Chemical Drugs - The company is entering a harvest period for high-barrier narcotic drugs, with the market for oral opioid analgesics expected to expand as cancer pain treatment rates increase. The company’s oxycodone sustained-release tablets have been approved and are anticipated to capture market share rapidly [2][3][40]. - The pressure from traditional antihypertensive drug procurement is gradually easing, allowing for stable profit contributions from products like nifedipine sustained-release tablets and controlled-release tablets of nitroprusside [2][3]. Financial Forecast and Valuation - The company is projected to achieve net profits of 183 million yuan, 251 million yuan, and 327 million yuan for the years 2024 to 2026, with growth rates of -19%, 37%, and 30% respectively. The current stock price corresponds to price-to-earnings ratios of 19X, 14X, and 11X for the same years [2][4][3].