SUNHERE(SZ:300452) Xinda Securities·2024-03-31 16:00Investment Rating - The investment rating for the company is "Buy" [2]. Core Views - The pharmaceutical excipients industry is expected to exceed 100 billion in scale, driven by the consistency evaluation of generic drugs and joint review policies [2]. - The company is positioned as a "small giant" in the domestic pharmaceutical excipients market, benefiting from a rich product variety and cost advantages [11][20]. - The company has a strong growth trajectory, with revenue and profit steadily increasing, and its financial indicators are superior to peers [30][37]. Summary by Sections Industry Drivers - The domestic pharmaceutical excipients market is projected to grow from 469 billion in 2016 to 846 billion in 2021, with an expected reach of 1,406 billion by 2025, reflecting a compound annual growth rate (CAGR) of 13.5% [24][42]. - The aging population is driving a steady increase in drug demand, which in turn boosts the demand for pharmaceutical excipients [39]. - High-quality excipients are gradually replacing low-end starch-based excipients due to their superior compressibility and adhesion properties [8][43]. Company Drivers - The company has 39 products registered with the CDE, with a leading position in cellulose-based excipients, significantly ahead of domestic competitors [27][25]. - The company benefits from scale effects and cost advantages, leading to a competitive pricing strategy for its cellulose-based excipients [9][25]. - The company is actively involved in setting industry standards and has successfully developed new products, including injectable excipients [9][26]. Capacity and Market Expansion - The company is set to launch a new production capacity of 9,000 tons, which will increase its total capacity to over 20,000 tons [26]. - The company has accelerated its overseas market expansion, achieving a compound annual growth rate of over 30% in overseas revenue over the past five years [10][51]. - The company’s overseas revenue reached 94.64 million in 2022, marking a year-on-year growth of 49.5% [10]. Financial Performance - The company’s revenue grew from 429 million in 2018 to 705 million in 2022, with a compound annual growth rate of 14.96% [30]. - The net profit attributable to the parent company is projected to be 165 million, 190 million, and 229 million for the years 2023, 2024, and 2025, respectively [2][3]. - The company’s gross margin and return on equity (ROE) are higher than those of its peers, indicating strong profitability [16][37].