HPGC(600664) 信达证券·2024-06-12 07:31Investment Rating - The report assigns a "Buy" investment rating to the company [2]. Core Insights - The core investment logic revolves around the restructuring of the marketing system and the growth of branded products, which is expected to drive significant profit growth in the industrial business [2][3]. - The company has shown a remarkable performance in Q1 2024, indicating that it may have overcome a low point in its operations [3]. - The industrial business's gross profit margin is anticipated to improve year by year, supported by the recovery of key products and the growth of high-end health products [2][28]. Summary by Relevant Sections Financial Performance - The company expects to achieve a net profit attributable to shareholders of approximately 206.86 million yuan in 2024, with a year-on-year growth rate of 19% [2]. - The gross profit margin for the industrial business is projected to be around 7.67% in 2024, with a continuous upward trend expected [2][28]. - The company’s total revenue for 2023 was approximately 15.46 billion yuan, reflecting a year-on-year growth of 11.9% [2]. Business Segments - The commercial business, primarily operated by the subsidiary Renmin Tongtai, is the largest pharmaceutical commercial company in Heilongjiang Province, with a revenue growth from 58.53 billion yuan in 2018 to 86.51 billion yuan in 2023 [4][23]. - The industrial business, focusing on nutritional supplements, accounted for 54% of the industrial revenue in 2023, with a compound annual growth rate of approximately 24% from 2020 to 2023 [28][44]. - The company’s two main products, zinc gluconate and calcium gluconate oral solutions, saw a sales volume of approximately 31.34 million and 30.08 million units respectively in 2023 [17][28]. Market Position - Renmin Tongtai has established a strong market presence, achieving 100% coverage in major hospitals and a market share increase from 31% in 2020 to 35% in 2022 [4][13]. - The company’s GNC business in China reported a revenue of approximately 11.17 billion yuan in 2023, marking a year-on-year increase of 199% [39]. Cost Management - The company has been focusing on cost control, with the sales expense ratio for the industrial business reaching 35.61% in 2023, indicating a significant increase from previous years [32][54]. - The management expense ratio for the industrial business was recorded at 14.13% in 2023, contributing to an overall improvement in expense management [54].