Liuzhou Medicine Liuzhou Medicine: a regional pharmaceutical circulation leader dedicated to the extension of the industrial chain Liuzhou Medicine 603368 Research Institute: Southwest Securities Analyst: Zhu Guoguang Date of Composing: 2016-06-22 Investment points Recommendation logic: Under the general trend of increasing concentration of pharmaceutical circulation industry, regional leaders will benefit; active transformation, supply chain extension projects are progressing smoothly, and strategic cooperation agreements have been signed with 14 hospitals, which will help reduce management costs and increase hospital customer viscosity. Further expand the sales share; DTP business to undertake the outflow of prescription drugs, direct pharmacies synchronized progress, retail layout is well-organized. The “two-vote system†catalyzes the concentration of the industry and benefits from regional distribution. 1) As a regional pharmaceutical circulation regional leading enterprise that focuses on the development of hospital sales, retail pharmacies and third terminals, the company has established good business relations with 100% of the top three hospitals in Guangxi, and has 14 prefecture-level cities in the region. Established a sound sales network and after-sales service system; 2) Under the policy catalysis including two-vote system, the concentration of pharmaceutical circulation industry will be further enhanced, and regional leaders with regional advantages, scale advantages and channel advantages will benefit significantly. . The DTP business started and the layout advantages were obvious. 1) The company will focus on promoting “DTP business + hospital side store + pharmaceutical e-commerceâ€, which will form a positive complement to the hospital pharmaceutical business; 2) The holding subsidiary Liuzhou Guizhongda Pharmacy established DTP business unit in 2015, focusing on promoting DTP business and Open convenience pharmacies inside and around the hospital, and build online pharmacy business, the whole terminal layout to undertake the outflow of prescription drugs; 3) At present, the company has 174 direct pharmacies, including 11 DTP pharmacies; 4) as a regional circulation leader, use channels, prices Advantages, Liuzhou pharmaceutical retail business is expected to have 35% market expansion in three years. The supply chain extension service is promoted and the hospital cooperation model is upgraded. 1) The company plans to invest 1.035 billion yuan to implement supply chain extension projects in 15-20 top three hospitals and 30-50 dimethyl hospitals in Guangxi. Currently, it has signed a supply chain extension service strategic agreement with 14 medical institutions in the region; 2) The company aims to extend logistics services to hospital pharmacies, upgrade the hospital cooperation model, and gradually transform to a comprehensive medical service provider; 3) The new service is expected to increase the company's hospital share by 20%-30%. Hospital distribution business and retail business will form a synergistic effect, and the advantages of taking out prescription outflows are obvious. The new business gradually landed and the entire industry chain extended. 1) Layout of the upstream pharmaceutical business, Xianyu Chinese Medicine is responsible for the operation of the Nanning Traditional Chinese Medicine Pieces Factory Base after its completion and commissioning. It is the company's first subsidiary to enter the production field, and will have further expectations for further expansion in the production field; 2) Establish Liuliu Medical Engaged in medical investment, hospital management, etc., to promote the future expansion of the company's business to downstream medical institutions; 3) to build medical equipment consumables distribution projects; 4) We believe that the company's vertical and horizontal industrial chain extension will enrich the company's product line, and follow-up is expected Its supply chain platform will increase in volume and profitability will increase. Earnings forecasts and investment advice. It is estimated that the EPS of the company in 16-18 years is 1.84 yuan, 2.33 yuan, 2.86 yuan, respectively, corresponding to PE 45 times, 36 times, 29 times. We are optimistic about the increase in hospital distribution share brought by the supply chain extension business. The DTP business has a huge space for development under the trend of prescription outflows. New businesses such as Chinese medicine decoction pieces are also in the early stage of heavy volume, and the first coverage is given a “buy†rating. Risk warning: regional competition or increased risk; health care reform policies or risks that are increasingly rigorous. Disposable Dressing Change Kit Dressing Change Kit,Wound Dressing Change Kit,Sterile Dressing Change Kit,Disposable Dressing Change Kit Henan Anbang Medical Supplies Co., Ltd. , https://www.anbangmedical.com
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