ZMC(600216) Great Wall Securities·2024-10-28 10:12Investment Rating - The report maintains a "Buy" rating for Zhejiang Medicine, indicating an expected stock price increase of over 15% relative to the industry index in the next six months [15]. Core Views - The company achieved record high performance in Q3 2024, with total revenue reaching 7.113 billion yuan, a year-on-year increase of 21.04%, and net profit attributable to shareholders at 850 million yuan, up 181.96% [1][2]. - The growth momentum from Q2 2024 continues, driven by strong performance in the vitamin E and A segments, with both volume and price increases contributing to the results [2][4]. - The approval of the "Segmented Production Pilot Work Plan for Biological Products" by the National Medical Products Administration is expected to facilitate the approval process for the company's innovative drug ARX788, potentially driving long-term growth [6][7]. Financial Summary - For the first three quarters of 2024, the company reported a gross profit margin of 40.05%, an increase of 6.48 percentage points year-on-year [2]. - The net profit margin for the same period was 10.66%, up 7.58 percentage points from the previous year, primarily due to rising prices of vitamin E and A [2]. - The company’s cash flow from operating activities increased by 68.51% year-on-year, reaching 692 million yuan [3]. Revenue and Profit Forecast - The projected revenues for 2024, 2025, and 2026 are 10.213 billion yuan, 11.074 billion yuan, and 11.861 billion yuan, respectively, with corresponding net profits of 1.573 billion yuan, 1.705 billion yuan, and 1.770 billion yuan [7]. - The expected EPS for the same years is 1.63 yuan, 1.77 yuan, and 1.83 yuan, with current P/E ratios of 5.8X, 5.4X, and 5.2X [7]. Market Conditions - The vitamin E and A prices are expected to remain strong, with the domestic market prices for vitamin A and E significantly higher than the average prices in 2023 [4]. - The report highlights that there are no new players or production capacity expected in the short term, which is favorable for the company's performance in the vitamin segment [7].