JZYY(SH:600750) Southwest Securities·2024-04-11 16:00Investment Rating - The report assigns a "Buy" rating for Jiangzhong Pharmaceutical, indicating an expected increase in stock price relative to the market index over the next six months [84]. Core Insights - Jiangzhong Pharmaceutical has established a strong market position in the gastrointestinal medicine sector with its two major brands, "Jiangzhong" and "Lihuo," which have created a competitive moat [4]. - The company has shown a steady increase in profitability, with a focus on optimizing its business structure [12]. - The report highlights the growth potential in the gastrointestinal drug market, driven by an aging population and increasing prevalence of gastrointestinal disorders [36]. Company Overview - Jiangzhong Pharmaceutical was founded in 1996 and went public in 1999 through a restructuring process. The company specializes in the production, research, and sales of traditional Chinese medicine and health products [4]. - The company has developed well-known brands, including "Jiangzhong" and "Lihuo," and has a significant market presence in the gastrointestinal medicine category [4][40]. Financial Performance - The report indicates that Jiangzhong Pharmaceutical's revenue from non-prescription drugs is projected to grow at a compound annual growth rate (CAGR) of 15% from 2024 to 2026, while prescription drug revenue is expected to recover gradually [78]. - The company achieved a revenue of 6.5 billion yuan in its health products segment in 2023, marking a year-on-year growth of 49.96% [58]. Product Portfolio - Jiangzhong Pharmaceutical's product lineup includes key offerings in the gastrointestinal, respiratory, and nutritional supplement categories, with notable products like "Jiangzhong Jianwei Xiaoshi Pian" and "Lihuo Lactobacillus Tablets" leading in their respective markets [21][27]. - The company has a strong focus on research and development, with plans to enhance its product offerings in the gastrointestinal health sector [58]. Market Position - Jiangzhong Pharmaceutical ranks among the top players in the gastrointestinal medicine market, with its "Jiangzhong Jianwei Xiaoshi Pian" being the leading product in the digestive medicine category for 19 consecutive years [40]. - The company is also expanding its presence in the throat and cough medicine market, with products like "Fangfang Caoshanhu Tablets" gaining significant market share [52]. Future Outlook - The report anticipates continued growth in the gastrointestinal drug market, with the industry expected to reach a market size of 633.2 billion yuan by 2024 [36]. - Jiangzhong Pharmaceutical is well-positioned to capitalize on this growth, leveraging its strong brand recognition and expanding product portfolio [40].