20170317-招商证券_香港_-白云山-00874.HK-Mixed_FY16_results__NEUTRAL_on_rich_valuation_11页_1mb_1mb

报告摘要

Baiyunshan (874 HK) Company Report Summary

Core Content

This report provides an analysis of Baiyunshan's (874 HK) financial performance for FY16, forecasts for FY17E and FY18E, and a valuation assessment based on DCF analysis and industry comparison.

Key Financial Performance in FY16

Revenue: RMB20bn (+5% YoY), slightly below expectations.
Net Profit: RMB1.5bn (+16% YoY), exceeding forecasts due to:
- Improved SG&A management and reduced promotion expenses.
- Lower financial expenses from better debt management.
- Government compensation of RMB275mn.
Recurring Net Profit: RMB1.1bn (-5% YoY) if excluding one-off items.

Major Growth Drivers

Sildenafil Citrate Tablets (Jinge): Became the second-largest revenue contributor in FY16 with sales topping RMB400mn.
Great Health Segment:
- Targeting 70% market share in China by 2018 (currently at ~55%).
- Aiming for 10% net margin (currently at ~6%).

Revised Forecasts for FY17E and FY18E

Revenue: Expected to grow at 8% for both years, slightly above previous estimates.
Net Profit: Projected to increase by 11% and 11% respectively.
Diluted EPS: Projected to rise by 14% and 18%, with a 2% and 5% margin above Bloomberg consensus.

Valuation Analysis

Current P/E Ratio: 21x for FY17E, which is considered fair relative to the industry average of 18.7x.
Target Price (TP): Raised to HK$23, implying a -3% downside from the current price of HK$23.75.
DCF Valuation: Suggests a 12-month target price of HK$23, with a WACC of 5.8% and a terminal growth rate of 3%.

Key Assumptions in Valuation

Risk-Free Rate: 2.8%
Equity Risk Premium: 5.6%
Beta: 0.55
Cost of Equity (COE): 5.9%
Cost of Debt (Rd): 6%
Effective Tax Rate: 17%
Terminal Growth Rate: 3%

Financial Highlights

Metric	2016A	2017E	2018E
Revenue (RMB mn)	20,036	21,660	23,384
Net Profit (RMB mn)	1,508	1,672	1,861
Diluted EPS (RMB)	0.93	1.03	1.14
P/E (x)	22.9	20.6	18.5
P/B (x)	2.0	1.9	1.7
ROE (%)	8.5	8.9	9.2

Risks and Catalysts

Risks:

Policy headwinds.
Weaker industry and herbal tea market growth.
Sluggish manufacturing segment.
Severe competition from peers.

Potential Catalysts:

Better WLJ volume and margin.
Sustainable growth of Jinge.
In-organic growth opportunities following the placement.

Shareholding Structure

GPHL: 45.23%
Value Partners: 4.91%
Blackrock: 4.66%
Free Float: 100%

Market Performance

12-month Price Performance:
- 874 HK: +33.4%
- HSI: +17.3%
52-week Range (HK$): 16.3-23.8
Market Cap (HK$ mn): 5,223
Avg. Daily Volume (mn): 1.12
BVPS (HK$): 10.69

Financial Model and Margins

Gross Margin: 32.1% (FY16), expected to remain stable in FY17E and FY18E.
SG&A Expenses: Expected to decrease by 10% and 11% in FY17E and FY18E respectively.
Operating Margin: Expected to rise to 6.4% by FY18E.
Net Margin: Projected to increase to 8.0% in FY18E.

Peer Comparison

Ticker	Name	P/E (FY17E)	P/B (FY17E)	ROE (%)
2196 HK	FOSUN PHARMA-H	17.9	2.4	14.6
1093 HK	CSPC PHARMACEUTI	22.8	5.2	22.6
1177 HK	SINO BIOPHARM	22.4	4.3	19.3
867 HK	CHINA MEDICAL SY	18.2	3.7	22.6
1513 HK	LIVZON PHARM-H	18.5	2.5	14.5
460 HK	SIHUAN PHARM	14.1	1.9	13.4
1530 HK	3SBIO INC	23.1	3.1	11.9

Summary of P&L Forecast Changes

Metric	2016	2017E	2018E
Revenue	5%	8%	8%
Gross Profit	-5%	8%	8%
SG&A Expenses	-3%	-10%	-11%
Net Income	16%	11%	11%
Diluted EPS	-8%	11%	11%

Conclusion

The report maintains a NEUTRAL rating for Baiyunshan (874 HK) due to its rich valuation, despite positive performance and growth expectations. The updated forecasts and improved SG&A management support the raised target price of HK$23, but the company faces challenges from market competition and potential policy changes. The financial model shows a steady growth trajectory with a focus on improving margins and increasing market share in key segments.

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