HVSEN BIOTECH(300871) 西南证券·2025-03-23 14:05Investment Rating - The report maintains a "Buy" rating for the company with a target price of 18.60 CNY over the next six months, while the current price is 12.85 CNY [1]. Core Views - The company's growth is driven by three main factors: scale effects, international expansion, and the development of a pet medical ecosystem [1]. - The company has seen rapid growth in its export business, with exports increasing from 3.78 million CNY in 2020 to 33.34 million CNY in the first half of 2024, and the Vietnam factory is expected to start production in Q2 2025 [2]. - The introduction of new pet medications and the integration of the industry chain are expected to create a second growth curve for the company [2]. Summary by Sections Company Overview - The company, established in January 2002, focuses on animal health, integrating R&D, production, and sales, and is a leading player in the veterinary drug industry [12]. - The main business segments include veterinary drug formulations, raw materials, and pet medical services, with significant market presence in both domestic and international markets [12]. Industry Analysis - The veterinary drug industry in China is experiencing growth, with the market size increasing from 484 billion CNY in 2017 to 673 billion CNY in 2022, reflecting a CAGR of 6.1% [21]. - The industry is currently at a cyclical low, but the demand for veterinary products is expected to rise as the livestock sector recovers [28]. Research and Innovation - The company emphasizes R&D, with over 1.7 billion CNY invested from 2021 to Q3 2024, and a growing team of over 180 researchers [44]. - The integration of raw material production and drug formulation is expected to lower costs and improve profitability [44]. Financial Forecast and Valuation - Revenue is projected to grow from 1,020 million CNY in 2023 to 1,936 million CNY by 2026, with a significant increase in net profit expected in 2025 [8]. - The company is expected to achieve an EPS of 0.93 CNY in 2025, with a corresponding PE ratio of 13.85 [8].