Investment Rating - The report assigns an "Accumulate" rating for the company [4] Core Viewpoints - The company benefits from the revival of traditional Chinese medicine, with stable core business and a strong moat for its "Shuanghuanglian" product series, which is expected to benefit from differentiation, segmentation, and upgrading trends [3] - The new controlling shareholder has strong background and capabilities, which will enhance resource matching, management models, and development strategies, promoting long-term and sustainable growth [3] Financial Performance Summary - Revenue is projected to reach CNY 2,070 million in 2023, with a year-on-year growth rate of 5.6%, followed by a decline of 6.2% in 2024, and then a recovery with growth rates of 9.8%, 10.1%, and 10.0% in the subsequent years [1] - Net profit attributable to shareholders is expected to grow significantly from CNY 44 million in 2023 to CNY 116 million by 2027, reflecting a year-on-year growth rate of 160.3% in 2023 and steady growth thereafter [1] - The company's return on equity (ROE) is projected to improve from 2.8% in 2023 to 6.4% by 2027 [1] Business Segments Summary - The company has a diversified business layout, including drug manufacturing and research services, with a focus on traditional Chinese medicine [12] - The "Shuanghuanglian" oral liquid is a leading product, capturing over 30% market share in 2023, with sales exceeding CNY 700 million [2] - The company’s CRO (Contract Research Organization) business is expected to experience growth due to favorable regulatory changes and increased demand for drug research services [2][3] Market Position and Competitive Landscape - The company ranks third in the market for cold medicine in public medical institutions, with a significant presence in the hospital sector [38] - The recent national centralized procurement is expected to enhance the company's market position, as the selected prices for its products remain stable, indicating limited impact on pricing [2][59]