CR Sanjiu(SZ:000999) Huachuang Securities·2024-11-01 17:39Investment Rating - The report maintains a "Recommended" investment rating for China Resources Sanjiu (000999) with a target price of 60.9 CNY, compared to the current price of 45.99 CNY [1]. Core Insights - The company's performance in the first three quarters of 2024 aligns with expectations, with total revenue, net profit attributable to shareholders, and net profit excluding non-recurring items reaching 19.74 billion, 2.96 billion, and 2.75 billion CNY respectively, reflecting year-on-year growth of 6.1%, 23.2%, and 19.5% [1]. - The growth in net profit is primarily attributed to increased non-operating income from the acquisition of Runsheng Pharmaceutical [1]. - The company is actively expanding its brand influence in the CHC (Consumer Health Care) sector and is focusing on product line expansion and value extraction in the prescription drug business [1]. - The integration of Kunming Pharmaceutical is progressing steadily, with plans to acquire a 28% stake in Tianshili, which is expected to enhance the company's competitive edge in the traditional Chinese medicine sector [1]. Financial Performance Summary - For Q3 2024, the company reported a gross margin of 53.2% and a net margin of 12.8%, with a year-on-year increase of 0.29 and 0.22 percentage points respectively [1]. - The company’s revenue for 2024 is projected to reach 27.83 billion CNY, with a year-on-year growth rate of 12.5% [2]. - The net profit attributable to shareholders is expected to be 3.4 billion CNY in 2024, reflecting a year-on-year growth of 19.2% [2]. - The company’s total assets are projected to grow from 40.15 billion CNY in 2023 to 58.91 billion CNY by 2026 [5]. Business Strategy and Outlook - The company is focusing on enhancing its brand matrix and deepening brand influence through quality media resources [1]. - The prescription drug business is expected to benefit from the integration with Kunming Pharmaceutical and the acquisition of Tianshili, which will strengthen the company's position in the market [1]. - The report anticipates steady growth in the OTC (Over-the-Counter) sector, supported by external acquisitions contributing to revenue growth [1].