The result is higher than our expectation
　　In FY20, Consun Pharma Group （CPG） achieved revenue of RMB 1,753mn, up 1.4% YoY （7.9% above our FY20E forecast）； gross profit margin was 74.6%, an increase of 1.6 ppt; profit attributable to shareholders decrease 19.9% YoY to RMB 209mn （beyond our FY20E expectation of 15.8%）。 The result is higher than our expectation due to good performance of Yulin segment.
　　UCG is the key growth driver
　　Consun segment achieved revenue of RMB 1,499mn, an increase of 6.8% YoY, accounting for 85.5% of the group's total revenue; The Kidney medicines achieved revenue of RMB 1,166mn and accounted for 77.8% of segment revenue, an increase of 6.2% YoY, which main product uremic clearance granules （UCG） is the key driver. In terms of women and children products, income in FY20 was RMB 181mn, up 6.2% YoY. Revenue from Contrast medium decreased 3.0% YoY to 136mn. Iopamidol Injection was officially used in clinical practice in April 2020 and 64 hospitals have been covered in 2020. We expect further increase in income through the advantages of the group's existing sales network.
　　Yulin performed better than expected
　　Yulin contributed RMB 254mn in FY20, down 21.6% YoY （vs down 51.9% in FY19）， accounting for 14.5% of CPG's total revenue. Yulin segment has been rectifying and implementing the "brand + channel + terminal" strategy. The sales share of ZHENG GU SHUI increased 0.87 ppt to 6.23% and ranked 5th in the market. The reform of Yulin has been paying off, and the recovery trend will be maintained in FY21E.
　　Maintain BUY with new TP HK$7.0
　　We raise CPG's EPS forcast by 8.1%/11.7% in FY21E and FY22E as we tuned up CPG's sales estimates by 24.1%/28.5% driven by Yulin’s recovery.
　　Consun is currently trading at 5.4x FY21E PE, compared with industry average at 8.9x FY21E PE. We maintain CPG at BUY with new TP HK$7.0, which translates to 8.9x FY21E PE.