CR Sanjiu(SZ:000999) Huachuang Securities·2025-08-20 00:24Investment Rating - The report maintains a "Recommendation" rating for China Resources Sanjiu (000999) with a target price of 36.4 CNY [2][7]. Core Views - The company experienced revenue growth of 5.0% year-on-year in 1H25, but net profit attributable to shareholders decreased by 24.3% and net profit excluding non-recurring items fell by 26.5% due to a high base effect from the previous year [2][7]. - The report highlights that the CHC (Consumer Health Care) business faced pressure due to a decline in demand, while the prescription drug business showed robust growth, driven by the integration of Tian Shi Li and the performance of existing products [7]. - The company is focusing on innovation in drug development, with significant investments in R&D and multiple projects in various therapeutic areas [7]. Financial Summary - Total revenue is projected to grow from 27,617 million CNY in 2024 to 36,889 million CNY in 2027, with a compound annual growth rate (CAGR) of approximately 10.3% [2][8]. - Net profit attributable to shareholders is expected to increase from 3,368 million CNY in 2024 to 4,477 million CNY in 2027, reflecting a CAGR of 15.2% [2][8]. - The report anticipates earnings per share (EPS) to rise from 2.02 CNY in 2024 to 2.68 CNY in 2027 [2][8]. Business Segments - The CHC business reported a revenue of 79.9 billion CNY in 1H25, down 17.9% year-on-year, primarily due to lower cold incidence rates [7]. - The prescription drug segment achieved a revenue of 48.4 billion CNY in 1H25, marking a 100% year-on-year increase, benefiting from the integration of Tian Shi Li and strong performance in existing products [7]. - The company is actively pursuing innovation in drug development, with 205 projects under research and development, and has received 8 drug registration certificates during the reporting period [7].