Guangzhou Pharmaceutical: the worst is over with a bright future

Investment points Company Marketing Adjustmentseriously affected the later development, the
basically completed. Benefit from the medical reform,company controlled the second half of 2008
its varieties of potential drugs, while rabies vaccine willshipments and inventory liquidation channels. To the
be a new profit growth point, future performance isoriginal channel of the third quarter of 2009, stocks
expected to significantly reverse.of basic clean-up completed, the sales to track.
Wanglaoji expected to maintain 25% growth. CantonQuarterly Bulletin last year, showing sales revenue
Medicine Future to look forward to the company.and net profit into positive growth, which main
Moreover, the integrated system is expected tobusiness net profit rose 75%. Show the company
remain drug.has begun selling becomes normal track, started to
Forecasting firm 2009 -2011 Earnings per share wereimprove management quality.
0.22 yuan, 0.44 yuan and 0.59 yuan for the first timeCompany owns, including Chen Li Chi, Jing Xiu Tang,
to "strongly recommended" rating.Zhi-Lin Pan Gaoshou and mining and other century-old,
Risk Note: Performance may reverse the extent andwith Xiaoke Pill, Wujibaifeng Pills, Huatuozaizao pill, Po
persistence of lower than expected; GuangzhouChai Pills, ointment mixing Loquat well-known brand
Pharmaceutical system integration uncertainty.Chinese medicine preparation. Huatuozaizao pill which
Guangzhou Pharmaceutical [11.575.47%] (600 332) forXiaoke Pill and essential drugs for the exclusive
the large state in southern China Pharmaceuticalvarieties, annual sales income of 5 billion yuan
companies , Ltd. Traditional Chinese medicinerespectively, and 1.5 billion yuan. We believe that the
Materials, manufacturing and proprietary Chinesecompany is much larger than the potential benefit of
medicines Drugs Wholesale, retail and import andmedical reform other small and medium sized
export trade. Quarterly Bulletin 2009, showing thepharmaceutical company. Which is expected to
three main business income of 2.9 billion, net profit ofXiaoke pill sales in 2010 expected to grow more than
153 million yuan, net profit excluding non-recurring30%, sales revenue is expected to reach about 650
gains and losses rose 75%. Since the upstreammillion yuan. Huatuozaizao pill will restore rapid growth.
element of raw materials prices fell 2.5 percent grossThe constellation of Pharmaceutical drug sales in 2010
margin, but the expense ratio decreased 3.3% duringreturned to normal, fade out and stop drink
the period in which Sell Costs down 15%.beverage industry promotion costs, the company will
Adjusted results are expected to reverse marketingbe profitable. Pan Gaoshou medicine after two years
2007, the company has taken aggressive salesof adjusted sales in 2010 will go on the right track,
strategy, the company to increase sales and channelyou may return to 2006 sales levels and profitability.
performance using a large number of Yahuo way,