Shanghai Pharma(601607) 东方证券·2024-11-18 08:47Investment Rating - The report assigns a "Buy" rating for the company with a target price of 27.8 yuan based on a 20x P/E ratio for 2024 [2]. Core Insights - Shanghai Pharmaceuticals is a leading integrated pharmaceutical company in China, with a strong presence in both pharmaceutical distribution and manufacturing. The company has shown steady revenue growth with a compound annual growth rate (CAGR) of 10.35% from 2018 to 2023, achieving revenue of 139.4 billion yuan in the first half of 2024, a 5.1% increase year-on-year [1][32]. - The pharmaceutical distribution segment remains the core revenue driver, contributing approximately 90% of total revenue, with a market share that is expected to continue increasing due to strategic integrations and new business developments [1][41]. - The pharmaceutical manufacturing segment is undergoing innovation and transformation, focusing on key products that are expected to contribute significantly to revenue growth [1][39]. Summary by Sections Company Overview - Shanghai Pharmaceuticals is a large pharmaceutical company listed in both Shanghai and Hong Kong, recognized as the second-largest national pharmaceutical distribution enterprise in China and the largest importer of pharmaceuticals [21][23]. Financial Performance - The company reported a revenue of 260.3 billion yuan in 2023, with a year-on-year growth of 12.2%. The net profit attributable to shareholders was 3.77 billion yuan, a decrease of 32.9% due to one-time losses, but it rebounded to 29.42 billion yuan in the first half of 2024, reflecting a 12.7% increase [4][32]. Pharmaceutical Distribution - The distribution segment is the backbone of the company's revenue, with a revenue contribution of 91.12% in the first half of 2024. The segment has maintained a CAGR of 10.9% from 2018 to 2023, achieving 1,270.31 billion yuan in revenue in the first half of 2024, a 6.91% increase year-on-year [41][39]. Pharmaceutical Manufacturing - The manufacturing segment is actively pursuing innovation, focusing on biopharmaceuticals, traditional Chinese medicine, and rare disease drugs. The company has a robust pipeline of 60 key products that are expected to drive revenue growth [1][39][57]. Business Strategy - The company is enhancing its distribution network through strategic mergers and acquisitions, including partnerships with major pharmaceutical companies like Sanofi, which has led to significant contract sales agreements [57][1]. Earnings Forecast - The forecast for earnings per share (EPS) is projected at 1.39 yuan for 2024, 1.53 yuan for 2025, and 1.72 yuan for 2026, indicating a positive growth trajectory [2].