Investment summary

Tasly’s pharmaceutical manufacturing sector has recovered steadily with its pharmaceutical commerce business growing faster. Plus the adjustment of channels, the trading volume of the second-line potential varieties and the heated class I new drugs such as rhPro-UK will explode hopefully after entering the NDRL. The result of the Company will return to the upward trend. Moreover, as a leader in modern traditional Chinese medicine industry, the internationalization of Compound Danshen Dripping Pills will also have a positive influence. The Company’s brand influence will be significantly improved. In light of comparable companies, we give Tasly an estimation of 35x PE in 2017 and a 12-month target price of RMB43.8, with the “Accumulate” rating maintained. (Closing price at 21 Aug 2017)