Youcare Pharmaceutical (SH:688658) Orient Securities·2024-12-10 00:48Investment Rating - The report initiates coverage with a "Buy" rating for the company [5][3]. Core Views - Yuyuan Pharmaceutical is positioned as an innovative domestic pharmaceutical group, transitioning from generic to innovative drugs, with a stable stock structure and a focus on cardiovascular products [2][24]. - The company has a strong market presence in cardiovascular medications, particularly with its leading product "Yuyuan Tong," which has shown significant sales growth [2][50]. - The company is actively developing its innovation platform, with promising new drugs like Hydroxy Safflower Yellow A, which has potential in treating acute ischemic stroke [2][3]. Summary by Sections Company Overview - Established in 2001 and listed on the Sci-Tech Innovation Board in 2020, Yuyuan Pharmaceutical has seen steady development in its existing product lines while rapidly advancing in innovative drug research [2][17]. - The company has a stable shareholding structure, with the founder holding 40.05% of the shares, and operates through 20 subsidiaries covering various pharmaceutical sectors [19][24]. Core Product Categories - The company has launched 86 products across various therapeutic areas, with cardiovascular drugs contributing significantly to revenue, accounting for approximately 63% in 2023 [24][38]. - "Yuyuan Tong" (Ginkgo Biloba Extract Injection) is the flagship product, with sales volume increasing from 104 million units in 2020 to 161 million units in 2023, reflecting a CAGR of 15.68% [2][50]. - The product "Huxin Wan" is included in both the national medical insurance and essential drug lists, showing strong growth potential [52][56]. Innovation and Pipeline - Yuyuan Pharmaceutical has established nine core technology platforms for drug discovery and development, enhancing its innovation capabilities [2][3]. - Hydroxy Safflower Yellow A is expected to enter the market soon, targeting multiple pathways for treating acute ischemic stroke, with significant market potential [2][3]. Financial Forecast and Investment Recommendations - The company is projected to achieve net profits of 303 million, 396 million, and 517 million yuan for 2024, 2025, and 2026, respectively, with corresponding EPS of 0.67, 0.88, and 1.15 yuan [3][7]. - A PE valuation method is applied, with a target price set at 25.52 yuan for 2025, based on an industry average PE of 29 times [3][5].