LIVZON GROUP(SZ:000513) Huafu Securities·2024-05-13 07:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][6]. Core Views - The company is positioned as a leader in the domestic pharmaceutical industry, focusing on innovative drugs and high-barrier complex formulations, with a robust long-term growth momentum [4][11]. - The company has a diversified product portfolio across various therapeutic areas, including digestive, reproductive, and mental health, which supports its growth [1][2][19]. Summary by Sections 1. Business Overview - The company has over 30 years of experience in the chemical formulation sector, with a comprehensive layout across multiple medical fields [11]. - It operates in various segments, including raw materials, chemical drugs, traditional Chinese medicine, biological drugs, and in vitro diagnostic reagents [11][19]. 2. Product Differentiation and Market Position - In the digestive field, the company has a strong foundation with multiple products, including the unique injectable form of Esomeprazole, which is expected to benefit from volume-based procurement [1][24]. - The reproductive health segment is growing, with the company's Leuprolide microsphere product maintaining a solid market position [1][31]. - The mental health segment is also seeing steady revenue growth, supported by strong competitive products [1][37]. 3. Revenue Structure Optimization - The raw materials segment has shown significant growth, with the company holding a leading position in several global export markets [2][41]. - The traditional Chinese medicine segment is expected to recover with the lifting of insurance restrictions, while the diagnostic reagents segment continues to strengthen its market position [2][19]. 4. Research and Development Pipeline - The company has a rich pipeline with several products entering critical clinical phases, including a focus on biological products with promising clinical results [3][4]. - The company is actively pursuing expedited clinical trials for key products, which could enhance its market offerings [3]. 5. Financial Forecast and Valuation - The company is projected to achieve net profits of 2.2 billion, 2.5 billion, and 2.8 billion yuan for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 13%, 14%, and 12% [4][5]. - The average PE ratio for comparable companies in 2024 is estimated at 16 times, indicating a favorable valuation outlook for the company [4].