HUADONG MEDICINE(SZ:000963) KAIYUAN SECURITIES·2025-06-03 00:23Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company is focusing on chronic diseases, tumors, and immunology, covering four major business segments: pharmaceutical manufacturing, pharmaceutical commerce, medical aesthetics, and industrial microbiology. It is continuously optimizing its product structure and transitioning from generics to innovation. The core products of its subsidiary, China Medical East, are maintaining stable market growth and increasing market share. The medical aesthetics segment is showing growth potential, and the innovative pipeline is entering a harvest period. The projected net profits for 2025-2027 are estimated at 40.61 billion, 47.16 billion, and 55.37 billion yuan, with corresponding EPS of 2.32, 2.69, and 3.16 yuan, leading to PE ratios of 16.3, 14.0, and 11.9 times, respectively [7][8][10]. Summary by Sections Company Overview - The company, established in 1993 and listed in 1999, has developed into a large comprehensive pharmaceutical company covering the entire pharmaceutical industry chain. It has transitioned towards a research and innovation-driven pharmaceutical enterprise since 2018 [18]. Business Performance - The company reported a revenue of 419.1 billion yuan in 2024, a year-on-year increase of 3.2%, and a net profit of 35.1 billion yuan, up 23.7% year-on-year. The pharmaceutical manufacturing segment generated 138.1 billion yuan in revenue, growing by 13.1%, while the medical aesthetics segment saw a slight decline in revenue [8][22]. Innovative Pipeline - The company is focusing on three core areas: oncology, endocrinology, and autoimmune diseases, with a differentiated layout in ADC and PROTAC technologies. The innovative pipeline includes over 80 projects, with several products entering clinical stages. The company is also actively pursuing collaborations and acquisitions to enhance its product offerings [9][39][55]. Financial Summary - The company’s financial metrics show steady growth, with projected revenues of 44.68 billion, 47.95 billion, and 51.83 billion yuan for 2025, 2026, and 2027, respectively. The gross margin is expected to improve from 33.6% in 2025 to 35.4% in 2027, while the net profit margin is projected to increase from 9.1% to 10.7% over the same period [10][28].