Core Viewpoint - The company announced that its wholly-owned subsidiary, Luling Kewhua, has acquired the marketing authorization and related production technology for Mesalazine enteric-coated tablets (0.5g specification) from Lifan Pharmaceutical for 34 million yuan (including tax) [1] Group 1: Transaction Details - The acquisition involves a change of the marketing authorization holder, which requires approval from the National Medical Products Administration [1] - The transaction does not constitute a related party transaction or a major asset restructuring [1] - The payment for the contract is divided into three installments, and the contract is valid until the marketing authorization holder is changed to Luling Kewhua and the production site is changed or increased to a designated site, completing verification of three batches of production and passing inspection [1] Group 2: Strategic Implications - The transaction aims to implement the "One Elderly" strategy, enrich the product pipeline, and strengthen the company's advantage in gastrointestinal medications [1]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company is acquiring a quality asset group from Future Pharmaceuticals for a total price of RMB 356 million, which includes various injectable products and their associated rights [7] - The acquisition is expected to enrich the company's product pipeline and enhance profitability, particularly in the pediatric medication sector [7] - The company has successfully defended against a lawsuit, which is anticipated to remove valuation pressure on its products [7] - The core products, including the Wuling and Bailing series, are expected to see steady growth in production and sales, supported by a planned issuance of convertible bonds for capacity expansion [7] - The company's projected net profit for 2025 is RMB 660 million, with upward adjustments for 2026 and 2027 net profits to RMB 910 million and RMB 1.13 billion, respectively [7] Financial Projections - Total revenue is forecasted to grow from RMB 2.58 billion in 2024 to RMB 4.52 billion in 2027, with a compound annual growth rate (CAGR) of approximately 16.25% [1][8] - The net profit attributable to the parent company is expected to increase from RMB 508 million in 2024 to RMB 1.13 billion in 2027, reflecting a CAGR of 24.22% [1][8] - The earnings per share (EPS) is projected to rise from RMB 0.72 in 2024 to RMB 1.61 in 2027 [1][8] - The price-to-earnings (P/E) ratio is expected to decrease from 23.83 in 2024 to 10.72 in 2027, indicating improving valuation metrics [1][8]