China Resources Sanjiu: Brand leads the innovation drive growth

The OTC business has led the rapid growth of the industry. The company has built a solid competitive barrier with its premium brand “999” and a commercial network covering more than 200,000 retail pharmacies throughout the country. Chinese medicine prescription drugs will maintain rapid growth. The technological innovation of the traditional Chinese medicine industry, that is, the modernization of traditional Chinese medicines, is the vane of future industry development.

Slightly adjusting the company's 2012-2014 EPS to be 0.97, 1.23, and 1.55, an increase of 24.36%, 26.80%, and 26.02% year-on-year, corresponding to 24, 18, and 15 times 2012E-2014 PE, respectively, optimistic about the company's future brand in the OTC field The strategy of category planning and technological innovation in the field of prescription drugs for traditional Chinese medicines will also continue to downgrade and sustain merger and acquisition expectations based on the company's costs in the second half of the year and maintain the company’s “overweight” rating.