ZUO LI YAO YE(300181) 东吴证券·2024-10-27 20:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company achieved a revenue of 2.045 billion yuan in the first three quarters of 2024, representing a year-on-year growth of 39.59%, with a net profit attributable to shareholders of 421 million yuan, up 46.93% [2] - The equity incentive plan aims for an average annual compound growth rate of 28% over the next three years, with a target to double net profit by 2027 [2][13] - The company focuses on high-quality products in the Wuling series, with multiple product lines including Wuling, Bailing, and formula granules showing significant growth potential [18] Summary by Sections 1. Equity Incentive Plan - The equity incentive plan includes granting up to 6.605 million restricted shares, accounting for 0.94% of total share capital, with a grant price of 8.07 yuan per share [13] - The performance targets for the next three years are set with net profit growth rates of no less than 30% for 2025, 66% for 2026, and 110% for 2027, based on 2024 figures [15] 2. Strategic Focus on Wuling Series - The Wuling series saw a revenue increase of 24.88% in the first three quarters of 2024, driven by significant sales growth in Wuling capsules and Lingze tablets [18] - The Bailing series is recovering, with sales volume increasing by 22.14% year-on-year, and the upcoming launch of Bailing capsules is expected to provide a second growth curve [25] - The traditional Chinese medicine pieces and formula granules are experiencing substantial growth, with sales revenue increasing by 51.24% and 175.96% respectively [18] 3. Profit Forecast and Investment Rating - The forecast for net profit attributable to shareholders for 2024 has been adjusted down to 543 million yuan, while the 2025 estimate remains at 714 million yuan [26] - The 2026 net profit forecast has been raised to 894 million yuan, with corresponding P/E ratios of 21, 16, and 13 for 2024, 2025, and 2026 respectively [26] - The current valuation corresponds to a PEG of less than 1, supporting the "Buy" rating [26]