\u3000\u3000 Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) (603896)
Revenue and profits increased steadily, and good results were achieved in the nationwide promotion of water testing
On January 27, 2022, the company released the performance express of 2021: in 2021, the company realized an operating revenue of 767 million yuan, a year-on-year increase of 20.61%; The net profit attributable to the parent company was 199.5 million yuan, a year-on-year increase of 31.51%; The net profit attributable to the parent company after deduction was 183 million yuan, a year-on-year increase of 33.65%. By quarter, the company's Q1 / Q2 / Q3 / Q4 revenue was RMB 174 / 143 / 162 / 288 million respectively, with a year-on-year increase of 31.12% / 38.62% / 2.80% / 19.01% respectively; The net profit attributable to the parent company was RMB 0.41/0.14/0.32/113 million respectively, with a year-on-year increase of 25.67% / 44.26% / 30.04% / 32.35% respectively; The net profit deducted from non profits was RMB 0.36/0.09/0.31/107 million respectively, with a year-on-year increase of 13.94% / 297.32% / 25.34% / 24.42% respectively. The growth rate of the company's revenue and profit is in line with our previous expectations. The company's products have clinical value and there is a large growth space to expand markets outside the province in the future. According to the company's performance express, our profit forecast for 2021 is slightly lowered and remains unchanged from 2022 to 2023. It is expected that the net profit attributable to the parent company will be adjusted from 203 / 264 / 345 million yuan to 200 / 264 / 345 million yuan from 2021 to 2023, and the corresponding EPS will be 1.31, 1.73 and 2.27 yuan / share respectively, The current share price corresponding to PE is 38.5 / 29.1 / 22.3 times respectively, maintaining the "buy" rating.
The products have the core advantages of seed source, cultivation and processing
The company's products have the core advantages of seed source, cultivation and processing: in terms of seed source, the company independently selects nine high-quality seed sources with independent intellectual property rights, and the content of breeding active ingredients is high, which casts a moat for the company. In terms of cultivation, the company ensures the high quality of medicinal materials by imitating wild organic cultivation, and uses Internet of things technology to trace the whole process of planting. In terms of processing, the supersonic airflow wall breaking technology independently developed by the company significantly improves the product safety, and the original wall removal purification technology improves the content of active ingredients by more than 8 times, with a long patent protection period.
Tablet dosage forms improve customer experience, carry out distribution channel reform and promote national layout
The company's traditional sales areas are concentrated in Zhejiang Province, and there is still room for expansion in the provincial market. In the market outside the province, the company carried out marketing reform outside the province in 2020: first, the company promoted tablet products for the market outside the province, avoided the disadvantages of inconvenient carrying and use of powder, and improved the use experience (less bitterness); Second, the company has gradually transformed the self operated mode outside the province into the distribution mode. Through the dealers having rich marketing experience in the local area, the promotion effect is more effective. Marketing reform is expected to solve the pain points of development outside the province and give it growth power.
Risk tip: the promotion outside the province is less than expected, and the policy implementation of traditional Chinese medicine is less than expected.
