Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's profitability is steadily improving, with revenue and profit reaching a new quarterly high [1] - The core products are showing robust growth, and the company's profit margins are being maintained despite price pressures from collective procurement [8] - The company is expected to continue its growth trajectory, particularly in the OTC market, while maintaining a high dividend payout ratio [8] Financial Performance Summary - Total revenue for 2024 is projected at 25.78 billion yuan, a year-on-year increase of 32.71% [8] - Net profit attributable to shareholders for 2024 is expected to be 5.08 billion yuan, also reflecting a 32.60% increase [8] - The earnings per share (EPS) for 2024 is forecasted to be 0.72 yuan, with a price-to-earnings (P/E) ratio of 21.99 [1][9] Product Performance Summary - The revenue from the Wuling series is expected to reach 14.38 billion yuan in 2024, with a year-on-year growth of 17.14% [8] - The Chinese herbal medicine series is projected to generate 6.73 billion yuan in revenue, marking a significant increase of 46.02% [8] - The revenue from Chinese herbal formula granules is anticipated to grow by 143.19%, reaching 1.02 billion yuan [8] Future Projections - The company’s net profit is projected to reach 6.55 billion yuan in 2025 and 8.41 billion yuan in 2026, with corresponding P/E ratios of 17 and 13 [8] - By 2027, the net profit is expected to reach 10.41 billion yuan, with a P/E ratio of 11 [1][9]

Core Viewpoint - Zhaoli Pharmaceutical (300181) reported steady growth in its performance for 2024, with significant revenue and profit increases driven by its core products and effective pricing strategies [1][6]. Financial Performance - In 2024, the company achieved revenue of 2.58 billion yuan, a year-on-year increase of 32.81% - The net profit attributable to shareholders was 505 million yuan, up 31.79% - The non-recurring net profit was 503 million yuan, growing by 34.75% - Earnings per share (EPS) stood at 0.72 yuan [1]. Product Performance - The core product, the Wuling series, showed robust growth, with a revenue increase of 17.14% in 2024 - Wuling capsules saw sales volume and revenue growth of 22.62% and 15.96% respectively, while Lingze tablets experienced sales volume and revenue growth of 23.17% and 22.64% respectively [2][3]. Market Dynamics - The Wuling capsules, a unique product and a national Class I new drug, have maintained stable pricing despite a 21% price drop in 2022 during collective procurement - The product is well-positioned in the market, especially in public grassroots medical terminals, with ongoing research into its application for Alzheimer's disease prevention [3]. Strategic Developments - The Bailing series, including Bailing tablets and capsules, was selected in the national collective procurement, which is expected to enhance competitiveness in various regions - Short-term projections indicate a 15.25% increase in sales for Bailing tablets, although revenue may decrease by 7.23% due to a 3% price drop [4]. Business Growth Areas - The company has effectively leveraged its "one body, two wings" strategy, resulting in a 45.82% revenue increase in traditional Chinese medicine slices and a 145.34% increase in formula granules in 2024 [5]. Profit Forecast - The company is expected to maintain strong performance due to its competitive advantages, effective marketing strategies, and favorable government policies supporting traditional Chinese medicine - Revenue projections for 2024-2026 are 2.596 billion, 3.206 billion, and 3.811 billion yuan respectively, with net profits of 534 million, 713 million, and 912 million yuan [6][7].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index in the next six months [5][20]. Core Insights - The company achieved a revenue of 2.58 billion yuan in 2024, representing a year-on-year growth of 32.81%, and a net profit of 505 million yuan, with a growth rate of 31.79% [2][3]. - The company continues to show strong performance in its core products, with all three major products achieving over 15% growth in sales [2]. - The company has a high dividend payout ratio of 98.58%, reflecting management's confidence in future growth [9]. Financial Performance Summary - Revenue projections for 2024-2026 are 25.8 billion yuan, 33.85 billion yuan, and 42.73 billion yuan, with respective year-on-year growth rates of 33%, 31%, and 26% [9]. - Net profit projections for the same period are 5.05 billion yuan, 6.7 billion yuan, and 8.68 billion yuan, with year-on-year growth rates of 32%, 33%, and 30% [9]. - The company’s return on equity (ROE) is expected to increase from 14.1% in 2023 to 22.6% in 2026 [11]. Product Performance Summary - The company’s core product, Wuling Capsule, has a significant market presence, with 6 provinces yet to implement centralized procurement, indicating potential for continued growth [3]. - The sales of the Lingze Tablets and the Bailing Tablets are expected to recover post-2024 due to improved pricing strategies and market conditions [3]. - The Chinese herbal medicine series has seen a substantial revenue increase of 45.82% due to the popularity of Wumei Soup [2]. Market Strategy Summary - The company is focusing on both hospital and online markets, leveraging its core products' status as national essential medicines to enhance market penetration [4]. - A dual-channel strategy is being employed, combining offline pharmacy networks with online platforms to create a comprehensive consumer engagement model [4].