CONBA(SH:600572) GOLDEN SUN SECURITIES·2024-06-05 01:02Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for future performance [49]. Core Insights - The company is focused on the traditional Chinese medicine (TCM) sector, with a clear strategy to enhance its core business in TCM while expanding its product offerings in chemical drugs and health consumer products [20][57]. - The company has seen significant growth in its key products, with the "Kang En Bei" brand's intestinal medicine series achieving nearly 1.3 billion in sales, and the "Zhi Xin Zai" musk heart drop continuing to gain traction in the market [5][26][58]. - The company is expected to benefit from potential adjustments to the national essential drug list, which may increase the proportion of TCM products [34][35]. Summary by Sections Company Strategy and Performance - The company has established a long-term incentive mechanism, including a stock option plan that aims to align employee interests with company performance [2]. - The company has a strong focus on brand and academic development, cultivating well-known TCM OTC products [4][20]. - The company has experienced a rebound in sales, with a projected revenue growth rate of 14% for its TCM business from 2024 to 2026 [47]. Product Performance - The "Kang En Bei" intestinal medicine series has maintained a leading position in the domestic market, with sales growth of 30% in 2023 [5]. - The "Jin Di" compound honeysuckle syrup has returned to a growth trajectory, with expectations for further sales increases [6]. - The "Tian Bao Ning" ginkgo leaf product has opened up hospital markets through successful bidding in multiple provinces [11]. Financial Projections - The company forecasts net profits of 760 million, 847 million, and 935 million for 2024, 2025, and 2026 respectively, with growth rates of 28.5%, 11.4%, and 10.3% [49][71]. - The company is currently undervalued, with a projected PE ratio of 17.6x for 2024, indicating potential for valuation recovery [49]. Market Position and Competitive Advantage - The company has a diversified product portfolio, focusing on TCM, chemical drugs, and health consumer products, which positions it well for future growth [20][47]. - The company has made strategic acquisitions to enhance its capabilities in the TCM sector, including a significant stake in a TCM university's herbal medicine company [29][73].