TRT(600085) 诚通证券·2025-03-07 15:10Investment Rating - The report gives a "Buy" rating for Tongrentang [11][15]. Core Views - Tongrentang is a representative of high-quality traditional Chinese medicine with a history of 356 years, focusing on the production, sales, research, and distribution of traditional Chinese medicine [3][26]. - The company has a stable product portfolio, with its top five products consistently contributing around 46% to its pharmaceutical sales, and it maintains a strong market share in key products like the An Gong Niu Huang Wan [4][10]. - The report highlights the company's comprehensive supply chain management, from raw material sourcing to retail, ensuring product quality and operational efficiency [4][5]. Summary by Sections Company Overview - Founded in 1669, Tongrentang has evolved into a large-scale enterprise integrating production, sales, research, and distribution of traditional Chinese medicine [3][26]. - The company produces over 400 types of traditional Chinese medicine, with key products including An Gong Niu Huang Wan and Liu Wei Di Huang Wan, which support its brand development and stable operations [3][29]. Business Model - Tongrentang employs a "big variety" strategy, focusing on high-margin products, with its top five products showing stable sales growth [4][12]. - The company has established a full industry chain covering the cultivation of medicinal materials, production of traditional Chinese medicine, and retail, ensuring quality control and operational efficiency [4][5]. Market Dynamics - The report notes a decline in the prices of medicinal materials, which alleviates cost pressures for the company [5][6]. - The introduction of a pilot program for importing natural cow bile is expected to ease supply constraints for key raw materials [5][6]. Financial Forecast and Valuation - Revenue projections for 2024-2026 are estimated at 187.7 billion, 203.3 billion, and 222.7 billion yuan, with corresponding net profits of 16.7 billion, 19.4 billion, and 22.6 billion yuan [11][15]. - The report indicates that Tongrentang's price-to-earnings ratio for 2024 is approximately 30 times, slightly above the industry average, justifying the "Buy" rating [11][15].