JZYY(600750)2025-01-15 07:03Investment Rating - The report maintains a "Buy" rating for Jiangzhong Pharmaceutical with a target price of RMB 31.00 [4][5]. Core Insights - Jiangzhong Pharmaceutical's Q424 performance is expected to show improvement compared to the previous quarters, with a projected high single-digit profit growth for 2024 being achievable [1]. - The company will continue to focus on its OTC (over-the-counter) business, aiming for a revenue target of RMB 5 billion in 2025, representing a 19% growth from the estimated RMB 4.2 billion in 2024 [2]. - The prescription drug business is anticipated to recover as the impact of centralized procurement diminishes, while the health business is undergoing restructuring to enhance profitability [2][3]. Summary by Sections Q424 Business Update - Jiangzhong Pharmaceutical's overall performance in Q424 is expected to improve year-on-year, with significant growth in its OTC products due to favorable inventory conditions [1]. - The prescription drug segment is projected to see a reduced decline in revenue compared to previous quarters, while the health segment continues to face challenges [1]. Future Business Focus - The company will prioritize its OTC business, with plans for both organic growth and acquisitions, particularly in the gastrointestinal and throat health OTC product areas [2]. - Key OTC products like Jianwei Xiaoshi Pian are expected to see increased sales due to diversified usage scenarios [2]. Financial Projections - The revised stock incentive plan indicates a compound annual growth rate (CAGR) of 12% for EPS from 2023, with net profit targets set at RMB 8.9 billion, RMB 10 billion, and RMB 11.1 billion for 2025, 2026, and 2027 respectively [3]. - The company plans to maintain stable dividend payouts of around RMB 700-800 million, supported by a strong cash position [3]. Valuation - The target price of RMB 31.00 is derived using the Sum-of-the-Parts (SOTP) valuation method, reinforcing the "Buy" recommendation [4]. - The current stock price is RMB 21.55, indicating a potential upside of 43.9% [9]. Key Financial Data - Revenue projections show a growth trajectory from RMB 4.166 billion in 2024E to RMB 6.183 billion by 2028E [7]. - Net profit is expected to increase from RMB 759 million in 2024E to RMB 1.224 billion by 2028E [7].