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1 公司报告业绩分析 丽珠医药 (1513 HK) 受惠先前的销售制度改革丽珠医药于 8 月 19 日公布 16 上半年总体盈利和核心净利润分别为人民币 4.09 亿 ( 同比升 20%) 及 3.64 亿 ( 同比升 27%), 符合我们预期 16 第 2 季盈利也符合我们预期, 录得人民币 1.75 亿, 同比大增 18%(15 第 2 季 : 升 3%) 尽管我们下调 财年各年的盈利预测 1%, 我们认为丽珠受惠于两年前展开的销售制度改革, 未来盈利增长理想 维持买入评级, 我们将按分部总和计算估值的基础年向前滚动至 17 财年, 目标价由 港元上调至 港元 激素药物销售理想, 推动增长核心利润同比增长 20% 至人民币 4.09 亿, 符合我们预期, 但较彭博预测低 10% 16 上半年总收益为人民币 亿, 较我们预测高 4%, 受惠激素药物销售强劲 ( 较我们预测高 48%), 当中丽申宝及醋酸亮丙瑞林微球的销售分别按年增长 57% 及 42% 至人民币 2.88 亿及 1.93 亿 我们上调激素药品的销售预测,16 财年上调 17%,17-18 财年各年上调 19%, 预示我们预测 16 下半年的激素销售维持大致稳定于人民币 7.05 亿 ( 按年升 35%) 我们维持醋酸亮丙瑞林微球的 16 财年全年销售预测不变, 为人民币 4.13 亿 ( 按年升 40%) 高毛利药品成为增长动力艾普拉唑肠溶片按年跃升 70% 至人民币 1.42 亿, 带动 16 上半年的消化系统药品销售同比增加 14% 至人民币 3.12 亿, 较我们预期高出 3% 值得注意的是, 神经系统药品注射用鼠神经生长因子于 16 上半年的销售达到人民币 2.35 亿, 同比大涨 78% 在多个增长引擎的驱动下, 我们将 财年的西药销售预测上调 10%-12%, 以及总收益预测轻微上调 3%-4% 上述大部分药品销售的毛利率超过 70%, 带动毛利率由 15 上半年的 61.2% 大幅提升至 16 上半年的 64.2% ( 我们预测为 61.8%) 因此, 我们将 财年的毛利率预测上调 个基点, 分别达到 62.5%/62.3%/62.2% 增长来自销售改革上述销售增长是基于丽珠两年前与国内分销商展开的销售制度改革 我们相信, 于 16 上半年采用的财务入账方法计入一部分的分销商及相关营销成本 因此, 我们上调 财年的运营开支占销售比率预测, 由 49.2% 水平上调至 52%, 而 16 上半年比率为 49.7%, 高于我们预测的 48.2%, 我们相应下调 财年各年的核心利润预测 1% 我们现时预测 财年的盈利年复合增长率为 18.1%( 先前预测 :18.4%) 目标价由 港元上调至 港元, 维持买入我们按分部总和计算的新目标价为 港元, 相当于 17 财年预测市盈率 24.3 倍 ( 调整前 :19.6 倍 ), 或 EV/EBITDA 11.8 倍, 相对行业平均值为 13.2 倍 我们认为估值溢价合理, 原因包括丽珠 :(1) 是中国领先的激素及头孢类抗生素药厂 ; 及 (2) 不同医疗领域专长 公司单抗生物药 疫苗及液体活检的研发估值估计为 65 亿港元 ( 或每股 港元 ), 其尚未计入我们的目标价, 占我们现时估值的 30% 图 1: 盈利预测 截至 Dec 31 ( 人民币百万 ) FY14A FY15A FY16F FY17F FY18F 营业额 5,544 6,621 7,879 9,265 10,751 净利润 实际盈利 每股实际盈利 (RMB) 每股股息 (RMB) 市盈率 (x) 股息率 (%) 市净率 (x) 净债务与股本 (%) 3.4 (13.2) (27.3) (33.5) (32.8) 每股实际盈利增长 (%) 资料来源 : 国信证券 ( 香港 ) 研究部 中国 医疗保健生物技术与制药 2016 年 8 月 22 日买入 目标价 上次评级 / 目标价 收盘价 (21 Aug 16) HKD49.30 买入 HKD44.05 HKD42.00 Upside/downside (%) 17.4 恒生指数 总市值 (HKDb/USDb) 20.7/ 周最高 / 最低 (HKD) 日均成交额 (USDm) 0.8 流通量 (%) 54.0% 资料来源 : 彭博 股价表现 HKD Aug-15 Price(LHS) 股票数据 1M 3M 12M 绝对回报 (%) 绝对回报 (USD, %) 相对 HSI 回报 (%) 1.0 (1.4) 2.7 资料来源 : 彭博 公司简介丽珠医药集团是一间有多种医药专长和一体综合型的中国制药商, 约有 230 产品类型 集团销售包括五个主要医疗领域 : ( 一 ) 雌激素 ; ( 二 ) 中药 ; ( 三 ) 消化系统用药 ; ( 四 ) 抗生素 ; ( 五 ) 诊断设备 集团约有 5% 6% 的营收 (15 财年 ) 来自基本医药目录 ( 基药 ) 中的药物销售 抗生素销售额占 15 财年总营收的 28.4% 集团的 A 股仍在中国上市, 它的 B 股已在 2014 年 1 月 16 日转往香港交易所上市 上海上市的健康元药业 ( CH, 未评级 ) 是丽珠的单一大股东有 45.9% 的股份 (A 股包括在内 ) 资料来源 : 彭博 萧智舜 PhD 证监会中央编号 :AVV jason.siu@guosen.com.hk Apr-16 Rel. to HSI(RHS) 110% 105% 100% 95% 90% 85% 80% 75% 70% 研究报告仅代表分析员个人观点, 请务必阅读正文之后的免责声明 1

2 Figure 2 SOTP valuation Target PE based on peers FY17F FY17F PE SOTP SOTP DCF Target PE Target weight x x (HKD) (HKD) Western drug Gastrointestinal drug (digestive system) 12.1% DCF DCF DCF 6.04 Well-established drugs with consistent new products Implied PE at 24.8x cardio-cerebral vascular drug (heart and brain medicine) 2.1% Antibiotics 5.7% Hormone 19.1% DCF DCF DCF Very high entry barriers; perpetual growth assumed Implied PE at 31.9x Other western drugs 15.2% Chinese medicine 33.5% DCF DCF DCF anti-cancer Chinese medicine Implied PE at 25.4x Bulk medicine & intermediates 6.6% top supplier for both human and animal use Diagnostics reagents and equipment 5.6% High-end device sector Others 0.1% Total 100.0% EPS (in RMB) TP without hormone/ Chinese medicine/ digestive system drugs segment (in HKD) SOTP derived TP TP (in HKD) Implied PE (FY17F) 24.3 PEG 1.6 EV/ EBITDA (FY17F) 11.8 Source: Company data; Guosen Securities(HK) Research Figure 3 Changes in full-year sales forecast Actual Old New Old New Old New Year-ended Dec (RMB m) FY15 FY16F FY16F Diff FY17F FY17F Diff FY18F FY18F Diff Operating income Total western finished drugs 2,581 3,064 3, % 3,579 3, % 4,144 4, % Y-o-y change 21.4% 18.7% 30.5% 16.8% 18.3% 15.8% 16.9% H-o-h change % to total operating income 39.0% 40.2% 42.8% 40.1% 43.0% 40.2% 43.3% Shenqi Fuzheng injection 1,537 1,725 1, % 2,070 2, % 2,442 2, % Y-o-y change 17.2% 12.2% 8.6% 20.0% 20.0% 18.0% 18.0% % to total operating income 23.2% 22.6% 21.2% 23.2% 21.6% 23.7% 22.0% Chinese drug preparation products 1,945 2,141 2, % 2,544 2, % 3,003 2, % Y-o-y change 11.8% 10.1% 7.2% 18.8% 18.8% 18.0% 18.0% H-o-h change % to total operating income 29.4% 28.1% 26.5% 28.5% 26.7% 29.1% 27.2% Bulk medicine ,796 1, % 2,119 2, % 2,416 2, % Y-o-y change 33.1% 18.4% 18.4% 18.0% 18.0% 14.0% 14.0% H-o-h change % to total operating income 22.9% 23.6% 22.8% 23.8% 22.9% 23.4% 22.5% Diagnostic reagents and equipment % % % Y-o-y change 6.4% 7.7% 9.1% 8.5% 8.5% 10.2% 10.2% H-oh change % to total operating income 7.1% 6.6% 6.5% 6.1% 6.0% 5.9% 5.7% Others % % % Y-o-y change 10.4% 8.0% 8.0% 10.0% 10.0% 10.0% 10.0% H-o-h change % to total operating income 1.7% 1.6% 1.5% 1.5% 1.4% 1.4% 1.3% Total Operating Income 6,621 7,625 7, % 8,921 9, % 10,309 10, % Y-o-y change 19.4% 15.2% 19.0% 17.0% 17.6% 15.6% 16.0% Source: Company data; Guosen Securities(HK) Research Guosen Securities (HK) 2

3 Figure 4 Half-year sales forecast Guosen Actual Old New Year-ended Dec (RMB m) 1H15 2H15 1H16F 1H16 Diff 2H16F 2H16F Diff Operating income Total western finished drugs 1,219 1,362 1,357 1, % 1,707 1, % Y-o-y change 19.4% 23.3% 11.4% 34.4% 25.3% 27.1% H-o-h change 10.3% 11.8% 11.4% 34.4% 25.3% 27.1% % to total operating income 39.1% 38.9% 37.4% 43.3% 42.8% 42.3% Shenqi Fuzheng injection % % Y-o-y change 18.1% 16.4% 20.7% 15.2% 4.9% 2.8% % to total operating income 22.9% 23.5% 23.7% 21.7% 21.6% 20.6% Chinese drug preparation products 935 1, , % % Y-o-y change 13.0% 10.7% 14.1% 12.4% 6.4% 2.4% H-o-h change 2.4% 8.1% 14.1% 12.4% 6.4% 2.4% % to total operating income 30.0% 28.8% 29.4% 27.7% 26.9% 25.3% Bulk medicine % % Y-o-y change 38.3% 29.0% 20.8% 18.6% 16.5% 18.3% H-o-h change 8.5% 18.9% 20.8% 18.6% 16.5% 18.3% % to total operating income 22.2% 23.5% 23.0% 21.7% 24.0% 23.8% Diagnostic reagents and equipment % % Y-o-y change 8.9% 4.2% 29.0% 17.6% -11.2% 1.4% H-oh change -7.0% 12.0% 29.0% 17.6% -11.2% 1.4% % to total operating income 7.1% 7.1% 9.2% 6.9% 13.0% 6.1% Others % % Y-o-y change -37.1% 174.5% 77.5% -68.5% -47.0% 68.5% H-o-h change 117.2% 26.4% 77.5% -68.5% -47.0% 68.5% % to total operating income 1.6% 1.7% 2.4% 0.4% 0.8% 2.5% Total Operating Income 3,115 3,505 3,631 3, % 3,994 4, % Y-o-y change 18.5% 20.2% 16.6% 21.5% 13.9% 16.8% H-o-h change 6.8% 12.5% 3.6% 8.0% 10.0% 8.2% Source: Company data; Guosen Securities(HK) Research Guosen Securities (HK) 3

4 Figure 5 Half-year P&L forecast Guosen Actual Old New Year-ended Dec (RMB m) 1H15 2H15 1H16F 1H16 Diff 2H16F 2H16F Diff Total Operating Income 3,115 3,505 3,631 3, % 3,994 4, % Y-o-y change 18.5% 20.2% 16.6% 21.5% 13.9% 16.8% H-o-h change 6.8% 12.5% 3.6% 8.0% 10.0% 8.2% Total operating costs (1,210) (1,366) (1,388) (1,355) -2.3% (1,672) (1,597) -4.5% Gross Profit 1,906 2,139 2,243 2, % 2,322 2, % GPM 61.2% 61.0% 61.8% 64.2% 58.1% 61.0% Y-o-y change 16.9% 20.8% 17.7% 27.5% 0.0% 0.0% Business taxes and surcharges (36.2) (45) (49) (49) -0.3% (50) (54) 6.9% Business charges to sales ratio 1.2% 1.3% 1.4% 1.3% 1.3% 1.3% Selling expenses (1,169) (1,372) (1,398) (1,501) 7.4% (1,530) (1,654) 8.1% Selling expenses to sales ratio 37.5% 39.2% 38.5% 39.7% 38.3% 40.1% Administrative expenses (278) (328) (301) (329) 9.3% (423) (482) 14.0% admin expenses to sales ratio 8.9% 9.4% 8.3% 8.7% 10.6% 11.8% Financial expenses (19) (8) (19) (9) -54.0% (13) (23) 81.0% Impairment loss (29) (73) (4.7) (78.6) Add: Gain/ (losses) from changes in fair value 1 (1) (0.1) (0.4) Investment (losses)/ income (2.6) (1.7) Operating profit % % Operating margin 12.1% 9.0% 13.0% 12.2% 7.7% 8.8% Opex to sales 47.6% 49.8% 48.2% 49.7% 50.2% 53.2% Non-operating income % % Non-operating expenses (6) (9) (0) (3) 602.8% (16) (13) -15.6% Profit before income tax % % Income tax expenses (77) (71) (94) (93) -0.9% (65) (69) 6.6% Tax rate 17.1% 19.9% 17.8% 17.9% 19.7% 18.2% Reported net profit after tax % % MI % % Adjustment (41) - Underlying net profit % % Diluted EPS (Underlying) (RMB/s) % % Y-o-y change Total Operating Income 18.5% 20.2% 16.6% 21.5% 4.9% 13.9% 16.8% 2.9% Gross Profit 16.9% 20.8% 17.7% 27.5% 9.7% 8.5% 16.7% 8.2% Business taxes and surcharges 14.8% 19.0% 35.3% 34.9% -0.4% 11.9% 19.6% 7.7% Selling expenses 14.5% 15.6% 19.6% 28.4% 8.8% 11.5% 20.5% 9.0% Administrative expenses 45.0% 20.4% 8.3% 18.4% 10.1% 28.9% 46.9% 18.0% Underlying net profit 6.1% 30.6% 28.2% 26.5% -1.7% 11.8% 11.5% -0.3% % to sales Total Operating Income 100.0% 100.0% 100.0% 100.0% 0.0% 100.0% 100.0% 0.0% Gross Profit 61.2% 61.0% 61.8% 64.2% 2.4% 58.1% 61.0% 2.9% Business taxes and surcharges 1.2% 1.3% 1.4% 1.3% -0.1% 1.3% 1.3% 0.1% Selling expenses 37.5% 39.2% 38.5% 39.7% 1.2% 38.3% 40.4% 2.1% Administrative expenses 8.9% 9.4% 8.3% 8.7% 0.4% 10.6% 11.8% 1.2% Profit before tax 14.4% 10.2% 14.5% 13.8% -0.8% 8.2% 9.3% 1.0% Underlying net profit 9.2% 7.2% 10.2% 9.6% -0.5% 7.0% 6.8% -0.2% Source: Company data; Guosen Securities(HK) Research Guosen Securities (HK) 4

5 Figure 6 Quarterly P&L forecast Actual Guosen Actual Guosen Actual Old New Year-ended Dec (RMB m) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 2Q16 Diff 1H16F 1H16 Diff 2H16F 2H16F Diff Total Operating Income 1,553 1,563 1,771 1,734 1,746 1,886 2, % 3,631 3, % 3,994 4, % Y-o-y change 26.5% 11.6% 19.4% 19.0% 12.4% 20.7% 30.5% 16.6% 21.5% 13.9% 16.8% H-o-h change 3.6% 8.0% 10.0% 8.2% Total operating costs (592) (618) (678) (687) (623) (765) (732) -4.3% (1,388) (1,355) -2.3% (1,672) (1,597) -4.5% Gross Profit , , ,122 1,121 1, % 2,243 2, % 2,322 2, % GPM 61.9% 60.5% 61.7% 60.4% 64.3% 59.5% 64.1% 61.8% 64.2% 58.1% 61.0% Y-o-y change 29.5% 6.3% 15.7% 22.4% 16.8% 18.7% 38.3% 17.7% 27.5% 0.0% 0.0% Business taxes and surcharges (19) (18) (22) (23) (25) (24) (24) -0.7% (49) (49) -0.3% (50) (54) 6.9% Business charges to sales ratio 1.2% 1.1% 1.2% 1.3% 1.4% 1.3% 1.2% 1.4% 1.3% 1.3% 1.3% Selling expenses (598) (571) (707) (665) (703) (695) (799) 14.9% (1,398) (1,501) 7.4% (1,530) (1,654) 8.1% Selling expenses to sales ratio 38.5% 36.6% 39.9% 38.4% 40.3% 36.9% 39.2% 38.5% 39.7% 38.3% 40.1% Administrative expenses (133) (145) (167) (161) (143) (158) (186) 17.7% (301) (329) 9.3% (423) (482) 14.0% admin expenses to sales ratio 8.5% 9.3% 9.4% 9.3% 8.2% 8.4% 9.1% 8.3% 8.7% 10.6% 11.8% Financial expenses (12) (7) (8) 1 (5) (14) (4) -73.9% (19) (9) -54.0% (13) (23) 81.0% Impairment loss (14) (16) (13) (60) (4.7) - (73.8) (4.7) (78.6) Add: Gain/ (losses) from changes in fair value 0 0 (2) 1 (0.1) - (0.3) (0.1) (0.4) Investment (losses)/ income (0) (0.9) (2.6) (1.7) Operating profit % % % Operating margin 12.1% 12.1% 10.0% 8.0% 14.0% 12.2% 10.8% 13.0% 12.2% 7.7% 8.8% Opex to sales 48.3% 47.0% 50.6% 49.0% 49.9% 46.5% 49.5% 48.2% 49.7% 50.2% 53.2% Non-operating income % % Non-operating expenses (5) (1) (1) (9) (0) - (2) (0) (3) 602.8% (16) (13) -15.6% Profit before income tax % % % Income tax expenses (44) (33) (37) (35) (46) (47) (47) -1.7% (94) (93) -0.9% (65) (69) 6.6% Tax rate 17.7% 16.4% 17.8% 22.8% 15.7% 20.3% 20.6% 17.8% 17.9% 19.7% 18.2% Reported net profit after tax % % % MI (9) % % % Adjustment (41) - Underlying net profit % % % Diluted EPS (Underlying) (RMB/s) % % % Y-o-y change Total Operating Income 26.5% 11.6% 18.7% 21.7% 12.4% 20.7% 30.5% 9.8% 16.6% 21.5% 4.9% 13.9% 16.8% 2.9% Gross Profit 29.5% 6.3% 19.3% 22.4% 16.8% 18.7% 38.3% 19.6% 17.7% 27.5% 9.7% 8.5% 16.7% 8.2% Business taxes and surcharges 29.5% 2.6% 16.6% 21.4% 33.6% 37.1% 36.2% -0.9% 35.3% 34.9% -0.4% 11.9% 19.6% 7.7% Selling expenses 31.5% 0.9% 18.3% 12.9% 17.5% 21.7% 39.8% 18.1% 19.6% 28.4% 8.8% 11.5% 20.5% 9.0% Administrative expenses 38.4% 51.5% 21.2% 19.5% 7.9% 8.7% 28.0% 19.3% 8.3% 18.4% 10.1% 28.9% 46.9% 18.0% Underlying net profit 9.8% 2.8% 30.0% 31.3% 35.3% 21.5% 18.2% -3.3% 28.2% 26.5% -1.7% 11.8% 11.5% -0.3% % to sales Total Operating Income 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% 100.0% 100.0% 0.0% 100.0% 100.0% 0.0% Gross Profit 61.9% 60.5% 61.7% 60.4% 64.3% 59.5% 64.1% 4.6% 61.8% 64.2% 2.4% 58.1% 61.0% 2.9% Business taxes and surcharges 1.2% 1.1% 1.2% 1.3% 1.4% 1.3% 1.2% -0.1% 1.4% 1.3% -0.1% 1.3% 1.3% 0.1% Selling expenses 38.5% 36.6% 39.9% 38.4% 40.3% 36.9% 39.2% 2.3% 38.5% 39.7% 1.2% 38.3% 40.4% 2.1% Administrative expenses 8.5% 9.3% 9.4% 9.3% 8.2% 8.4% 9.1% 0.7% 8.3% 8.7% 0.4% 10.6% 11.8% 1.2% Profit before tax 15.9% 13.0% 11.6% 8.8% 16.9% 12.4% 11.1% -1.3% 14.5% 13.8% -0.8% 8.2% 9.3% 1.0% Underlying net profit 9.0% 9.5% 7.5% 6.8% 10.8% 9.5% 8.6% -1.0% 10.2% 9.6% -0.5% 7.0% 6.8% -0.2% Source: Company data; Guosen Securities(HK) Research Guosen Securities (HK) 5

6 Figure 7 Changes in full-year P&L forecast Actual Old New Old New Old New Year-ended Dec (RMB m) FY15 FY16F FY16F Diff FY17F FY17F Diff FY18F FY18F Diff Total Operating Income 6,621 7,625 7, % 8,921 9, % 10,309 10, % Y-o-y change 19.4% 15.2% 19.0% 17.0% 17.6% 15.6% 16.0% H-o-h change Total operating costs (2,575) (3,060) (2,953) -3.5% (3,581) (3,491) -2.5% (4,137) (4,069) -1.6% Gross Profit 4,045 4,565 4, % 5,340 5, % 6,172 6, % GPM 61.1% 59.9% 62.5% 59.9% 62.3% 59.9% 62.2% Y-o-y change 18.9% 12.9% 21.8% 17.0% 17.2% 15.6% 15.7% Business taxes and surcharges (81) (99) (102) 3.3% (112) (116) 3.9% (129) (134) 4.3% Business charges to sales ratio 1.2% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% Selling expenses (2,542) (2,928) (3,156) 7.8% (3,479) (3,697) 6.3% (4,021) (4,279) 6.4% Selling expenses to sales ratio 38.4% 38.4% 40.1% 39.0% 39.9% 39.0% 39.8% Administrative expenses (606) (724) (812) 12.0% (803) (1,024) 27.5% (928) (1,183) 27.5% admin expenses to sales ratio 9.2% 9.5% 10.3% 9.0% 11.1% 9.0% 11.0% Financial expenses (27) (32) (32) 0.0% (25) (25) 0.0% (18) (18) 0.0% Impairment loss (102.8) Add: Gain/ (losses) from changes in fair value (0.2) Investment (losses)/ income Operating profit % % 1,077 1, % Operating margin 10.5% 10.3% 10.5% 10.3% 9.8% 10.5% 9.9% Opex to sales 48.8% 49.2% 51.7% 49.3% 52.2% 49.3% 52.1% Non-operating income % % % Non-operating expenses (16) (16) (16) 0.0% (17) (17) 0.0% (18) (18) 0.0% Profit before income tax % % 1,156 1, % Income tax expenses (148) (159) (162) 2.2% (184) (182) -0.9% (206) (205) -0.2% Tax rate 18.4% 18.5% 18.0% 18.4% 18.4% 17.8% 17.9% Reported net profit after tax % % % MI % % % Adjustment Underlying net profit % % % Diluted EPS (Underlying) (RMB/s) % % % Y-o-y change Total Operating Income 19.4% 15.2% 19.0% 3.8% 17.0% 17.6% 0.6% 15.6% 16.0% 0.5% Gross Profit 18.9% 12.9% 21.8% 8.9% 17.0% 17.2% 0.2% 15.6% 15.7% 0.2% Business taxes and surcharges 17.1% 22.4% 26.4% 4.1% 12.5% 13.1% 0.6% 15.6% 16.0% 0.5% Selling expenses 15.1% 15.2% 24.2% 9.0% 18.8% 17.1% -1.7% 15.6% 15.8% 0.2% Administrative expenses 30.5% 19.5% 33.9% 14.4% 10.8% 26.1% 15.3% 15.6% 15.5% 0.0% Underlying net profit 16.3% 20.6% 19.5% -1.0% 17.3% 17.2% -0.2% 17.6% 17.6% 0.1% % to sales Total Operating Income 100.0% 100.0% 100.0% 0.0% 100.0% 100.0% 0.0% 100.0% 100.0% 0.0% Gross Profit 61.1% 59.9% 62.5% 2.7% 59.9% 62.3% 2.5% 59.9% 62.2% 2.3% Business taxes and surcharges 1.2% 1.3% 1.3% 0.0% 1.3% 1.3% 0.0% 1.3% 1.3% 0.0% Selling expenses 38.4% 38.4% 40.1% 1.7% 39.0% 39.9% 0.9% 39.0% 39.8% 0.8% Administrative expenses 9.2% 9.5% 10.3% 0.8% 9.0% 11.1% 2.1% 9.0% 11.0% 2.0% Profit before tax 12.2% 11.2% 11.4% 0.2% 11.2% 10.7% -0.5% 11.2% 10.7% -0.5% Underlying net profit 8.1% 8.5% 8.2% -0.3% 8.5% 8.1% -0.4% 8.7% 8.2% -0.4% Source: Company data; Guosen Securities(HK) Research Guosen Securities (HK) 6

7 Figure 8 FY16F Revenue breakdown by major product categories Bulk medicine (antibiotics) 23% Diagnostic reagents & equipment 6% Others 2% Western drugs 43% other Chinese medicine products 5% Shenqi Fuzheng injection (Chinese medicine) 21% Source: Company data, Guosen Securities(HK) Research Figure 9 FY16F Revenue breakdown Bulk medicine (antibiotics) 23% other Chinese medicine products 5% Diagnostic reagents & equipment 6% Shenqi Fuzheng injection (Chinese medicine) 21% Others 2% digestive system (western drugs) 8% heart & brain (western drugs) 2% Antibiotics (finished drugs) (western drugs) 5% Gonadotropic hormones (western drugs) 16% Other western drugs 11% Blood and hemopoietic (western drugs) 1% Source: Company data, Guosen Securities(HK) Research Guosen Securities (HK) 7

8 Share Price (HK$) Livzon Pharma (1513 HK) Figure 10 Post HK-IPO forward (12-month) PE Band SD = 29.8x +1SD = 27.1X Mean = 20.2x SD = 15.1x -2SD = 13.7x 20 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Source: Company data, Guosen Securities(HK) Research Figure 11 Comparable tables 3 - mt h M k t c a p a v g t / o P ER H i st C ompa ny Ti c k e r P r i c e ( U S $ m) ( U S $ m) ( x ) P ER FY1 ( x ) Adjusted sector avg * The United Labor 3933 HK N/A N/A Luye Pharma Grou 2186 HK , N/A Livzon Pharm-H 1513 HK , Consun Pharmaceu 1681 HK Fosun Pharma-H 2196 HK , Baiyunshan Ph-H 874 HK , N/A Lansen Pharmaceu 503 HK N/A N/A N/A N/A N/A N/A 5.3 N/A 0.94 N/A Cspc Pharmaceuti 1093 HK , N/A 4.19 Sino Biopharm 1177 HK , Yichang Hec Chan 1558 HK , N/A Sihuan Pharm 460 HK , (4.5) Lee'S Pharm 950 HK N/A Sbio Inc 1530 HK , N/A N/A N/A Yichang Hec Chan 1558 HK , N/A N/A Dawnrays Pharmac 2348 HK * Outliners and "N/ A " entries are in red and excl. from the calculation of averages Source: Bloomberg data, Guosen Securities(HK) Research P ER FY2 ( x ) 3 - Yr EP S EP S FY1 EP S FY2 C a gr YoY% YoY% ( %) P EG ( x ) D i v y l d H i st D i v y l d ( %) FY1 ( %) P / B H i st ( x ) P / B FY1 ( x ) Guosen Securities (HK) 8

9 Figure 12 Past five year forward P/E curve for Livzon s A-share Forward P/E (x) 48.0 Figure 13 Post-IPO forward P/E curve for Livzon s H-share Forward P/E (x) SD= 21.4x SD= 31.7x SD= 19.2x Mean= 20.4x +1SD= 26.0x -1SD= 14.8x SD= 12.3x -1SD= 14.6x Mean= 16.9x 8.0-2SD= 9.2x Dec-11 2-Jun-12 2-Dec-12 2-Jun-13 2-Dec-13 2-Jun-14 2-Dec-14 2-Jun-15 2-Dec-15 2-Jun-16 Source: Bloomberg, Guosen Securities(HK) Research 10.0 Source: Bloomberg, Guosen Securities(HK) Research Figure 14 H-share relative to A-share for Livzon Pharm SD= 0.77x Mean= 0.68x SD= 0.59x Source: Bloomberg, Guosen Securities(HK) Research Guosen Securities (HK) 9

10 Summary financial statements(year to Dec 31) Profit & Loss (RMBm) FY14A FY15A FY16F FY17F FY18F Financial Ratios FY14A FY15A FY16F FY17F FY18F Revenue 5,544 6,621 7,879 9,265 10,751 Gross profit margin (%) Revenue growth (%) Operating profit margin (%) Cost of sales (2,143) (2,575) (2,953) (3,491) (4,069) Underlying profit margin (%) Gross profit 3,401 4,045 4,926 5,774 6,682 Net debt/equity (%) 3.4 (13.2) (27.3) (33.5) (32.8) Other income/(expense) (69) (81) (102) (116) (134) Net debt/total assets (%) 1.6 (6.9) (13.0) (17.7) (19.3) Operating expenses (2,673) (3,148) (3,967) (4,720) (5,462) Current ratio (%) Operating profit ,086 Dividend payout (%) Operating profit growth (%) Interest cover (x) Other non operating inc/(exp) Dividend cover (x) Finance income Acct. receivable turnover days Finance expenses (43) (55) (61) (56) (49) Acct. payable turnover days Associates & JCE Inventory turnover days Profit before taxation ,147 Cash cycle days Taxation (98) (148) (162) (182) (205) Dupont Analysis FY14A FY15A FY16F FY17F FY18F Non-controlling interests (38) (37) (50) (54) (55) Tax burden (%) Net profit Interest burden (%) Other Adjustments on UP (53) (84) (45) 0 0 Operating profit margin (%) Underlying Profit Asset turnover (x) Underlying profit growth (%) Leverage ratio (x) EPS (RMB) ROA (%) Underlying EPS (RMB) ROE (%) Underlying EPS growth (%) Source: Guosen Securities (HK) Research DPS (RMB) DPS growth (%) (80.0) 384 (3.0) (5.9) 0.0 Source: Guosen Securities (HK) Research Balance Sheet (RMBm) FY14A FY15A FY16F FY17F FY18F Cashflow (RMBm) FY14A FY15A FY16F FY17F FY18F Fixed assets 3,505 3,671 3,865 4,117 4,388 Operating profit Associates & JCE Depreciation & amortization Others Interest expense Non-current assets 4,137 4,500 4,558 4,853 5,171 Change in working capital (180) (159) (35) (89) (726) Inventories ,205 1,343 1,565 Tax paid (98) (148) (162) (182) (205) Debtors & prepayments 1,596 1,789 2,273 2,857 3,688 Other operating cashflow Bank deposits & cash ,510 3,083 3,177 Operating activities ,047 1, Others Purchase of non-current assets (Capex) (666) (477) (670) (760) (860) Current assets 3,166 3,578 5,995 7,290 8,438 Free cash flow (61) Bank & other borrowings , Disposal of non-current assets Trade & payables ,295 1,601 1,746 Associates & JCE (net) Taxation Interest received Others 1,309 1,839 1,987 2,081 2,167 Dividends received Current liabilities 2,669 3,155 4,508 4,724 4,589 Other investing cashflow (72) (81) Bank & other borrowings Investing activities (738) (558) (504) (592) (690) Others New loans raised ,343 1, Non-current liabilities Repayment of loans (1,167) (1,242) (1,943) (1,457) (1,183) Net assets 4,082 4,810 5,890 7,262 8,860 Dividends paid (216) (106) (168) (168) (168) Share capital Other financing cashflow , Premium & reserves 3,221 3,814 4,643 6,012 7,607 Financing activities (21) (315) 1, (40) Shareholders' funds 3,517 4,211 5,040 6,409 8,004 Inc/(dec) in cash (41) 54 1, Non-controlling interests Cash at beginning of year ,510 3,083 Total equity 4,082 4,810 5,890 7,262 8,860 Foreign exchange effect (4) BVPS (RMB) Cash at end of year ,510 3,083 3,177 Source: Guosen Securities (HK) Research Source: Guosen Securities (HK) Research Guosen Securities (HK) 10

11 Information Disclosures Stock ratings, sector ratings and related definitions Stock Ratings: Buy: A return potential of 10 % or more relative to overall market within 6 12 months. Neutral: A return potential ranging from -10% to 10% relative to overall market within 6 12 months. Sell: A negative return of 10% or more relative to overall market within 6 12 months. Sector Ratings: Overweight: The sector will outperform the overall market by 10% or higher within 6 12 months. Neutral: The sector performance will range from -10% to 10% relative to overall market within 6 12 months. Underweight: The sector will underperform the overall market by 10% or lower within 6 12 months. Interest disclosure statement The analyst is licensed by the Hong Kong Securities and Futures Commission. Neither the analyst nor his/her associates serves as an officer of the listed companies covered in this report and has no financial interests in the companies. Guosen Securities (HK) Brokerage Co., Ltd. and its associated companies (collectively Guosen Securities (HK) ) has no disclosable financial interests (including securities holding) or make a market in the securities in respect of the listed companies. Guo sen Securities (HK) has no investment banking relationship within the past 12 months, to the listed companies. Guosen Securities (HK) has no individual employed by the listed companies. Disclaimers The prices of securities may fluctuate up or down. It may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. The content of this report does not represent a recommendation of Guosen Securities (HK) and does not constitute any buying/selling or dealing agreement in relation to the securities mentioned. Guosen Securities (HK) may be seeking or will seek investment banking or other business (such as placing agent, lead manager, sponsor, underwriter or proprietary trading in suc h securities) with the listed companies. Individuals of Guosen Securities (HK) may have personal investment interests in the listed companies. This report is based on information available to the public that we consider reliable, however, the authenticity, accuracy or completeness of such information is not guaranteed by Guosen Securities (HK). This report does not take into account the particular investment objectives, financial situation or needs of individual clients and does not constitute a personal investment recommendation to anyone. Clients are wholly responsible for any investment decision based on this report. Clients are advised to consider whether any advice or recommendation contained in this report is suitable for their particular circumstances. This r eport is not intended to be an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. This report is for distribution only to clients of Guosen Securities (HK). Without Guosen Securities (HK) s written authoriza tion, any form of quotation, reproduction or transmission to third parties is prohibited, or may be subject to legal action. Such information and opinions contained therein are subject to change and may be amended without any notification. This report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guose n Securities (HK) and its group companies to any registration or licensing requirement within such jurisdiction. Guosen Securities (HK) 11

12 信息披露 公司评级 行业评级及相关定义 公司评级买入 : 我们预计未来 6-12 个月内, 个股相对大盘涨幅在 10% 以上 ; 中性 : 我们预计未来 6-12 个月内, 个股相对大盘涨幅介于 -10% 与 10% 之间 ; 减持 : 我们预计未来 6-12 个月内, 个股相对大盘跌幅大于 10% 行业评级超配 : 我们预计未来 6-12 个月内, 行业整体回报高于市场整体水平 10% 以上 ; 中性 : 我们预计未来 6-12 个月内, 行业整体回报介于市场整体水平 -10% 与 10% 之间 ; 低配 : 我们预计未来 6-12 个月内, 行业整体回报低于市场整体水平 10% 以上 利益披露声明 报告作者为香港证监会持牌人士, 分析员本人或其有联系者并未担任本研究报告所评论的上市法团高级管理人员, 也未持有其任何财务权益 本报告中, 国信证券 ( 香港 ) 经纪有限公司及其所属关联机构 ( 合称国信证券 ( 香港 )) 并无持有该公司须作出披露的财务权益 ( 包括持股 ), 在过去 12 个月内与该公司并无投资银行关系, 亦无进行该公司有关股份的庄家活动 本公司员工均非该上市公司的雇员 免责条款 证券价格有时可能非常波动 证券价格可升可跌, 甚至变成毫无价值 买卖证券未必一定能够赚取利润, 反而可能会招致损失 本研究报告内容既不代表国信证券 ( 香港 ) 的推荐意见, 也并不构成所涉及的个别股票的买卖或交易要约 国信证券 ( 香港 ) 或其集团公司有可能会与本报告涉及的公司洽谈投资银行业务或其它业务 ( 例如配售代理 牵头经办人 保荐人 包销商或从事自营投资于该股票 ) 国信证券 ( 香港 ) 不排除其员工有个人投资于本报告内所提及的上市法团 报告中的资料均来自公开信息, 我们力求准确可靠, 但对这些信息的正确性 公正性及完整性不做任何保证 本报告没有考虑到个别客户特殊的投资目标 财务状况或需要, 并不构成个人投资建议, 客户据此投资, 责任自负 客户在阅读本研究报告时应考虑报告中的任何意见或建议是否符合其个人特定状况 本报告并不存在招揽或邀约购买或出售任何证券的企图 本报告仅向特定客户传送, 未经国信证券香港书面授权许可, 任何人不得引用 转载以及向第三方传播, 否则可能将承担法律责任 研究报告所载的资料及意见, 如有任何更改, 本司将不作另行通知 在一些管辖区域内, 针对或意图向该等区域内的市民 居民 个人或实体发布 公布 供其使用或提供获取渠道的行为会违反该区域内所适用的法律或规例或令国信证券 ( 香港 ) 受制于任何注册或领牌规定, 则本研究报告不适用于该等管辖区域内的市民 居民或身处该范围内的任何人或实体 Guosen Securities (HK) 12