\u3000\u3000 Beijing Tongrentang Co.Ltd(600085) (600085)
Key investment points
Investment logic: Beijing Tongrentang Co.Ltd(600085) is a century old leading company in the traditional Chinese medicine industry. The company has a century old brand and rich product matrix. 1) Tongren Angong Niuhuang Pill increased in volume and price, with a total potential market space of 193.4 billion yuan; 2) Tonic products benefit from the operation of two production lines of Beijing Tongrentang Co.Ltd(600085) technology. The new base can produce more than 200 varieties, and the new production capacity of oral liquid is 180 million. In 2020, the output of tonic products will increase by 76% year-on-year, and Beijing Tongrentang Co.Ltd(600085) technology is expected to maintain 10% ~ 20% revenue and profit growth in 2022; 3) Major changes in management. 2022 is the end of the three-year action plan for the mixed reform of state-owned enterprises, Beijing Tongrentang Co.Ltd(600085) the mixed reform of state-owned enterprises can be expected.
Centennial Royal medicine creates a brand moat, and the mixed reform of state-owned enterprises is worth looking forward to: 1) brand advantage: Beijing Tongrentang Co.Ltd(600085) Centennial Royal medicine inheritance, nine projects have been selected into intangible cultural heritage projects, casting a Beijing Tongrentang Co.Ltd(600085) stable brand moat, and ranked first in the list of brands with the most historical and cultural heritage in Hurun China for two consecutive years in 2020 and 2021. 2) Product advantages: Beijing Tongrentang Co.Ltd(600085) the product matrix is rich, with more than 800 Chinese patent medicine specifications, more than 400 kinds of products are produced throughout the year, and there are more than 40 kinds of exclusive varieties. 3) Advantages of mixed reform: when the new chairman took office, Mr. di Shubing held important positions in many subsidiaries of Beijing Tongrentang Co.Ltd(600085) group and was proficient in Beijing Tongrentang Co.Ltd(600085) various businesses. 2022 marks the end of the three-year action plan for the mixed reform of state-owned enterprises, and the mixed reform is expected to continue.
The volume and price of Angong rose at the same time, ensuring the growth of production capacity release: 1) affected by the continuous price rise of natural musk and natural bezoar, the price of Angong Bezoar Pill increased by 10% to 860 yuan / capsule in December 2021. Angong Niuhuang Pill has a large market demand, and it is the first Chinese patent medicine for cardiovascular and cerebrovascular diseases in China’s urban retail pharmacies in 2020. Tongren Angong Niuhuang Pill market accounted for 54%, ranking first. According to the main indications of Angong Niuhuang Pill, we expect the market space of brain injury and cerebral infarction in the whole age group to be 160 million yuan and 1.78 billion yuan respectively, the market scale of infant pneumonia to be 110 million yuan, the market space of severe hepatitis in the whole age group to be 1.18 billion yuan, the market space of stroke fever patients in the middle-aged and elderly to be 2.02 billion yuan, and the market space of health care for the middle-aged and elderly to be 188.16 billion yuan, With a total of 193.4 billion yuan, the potential market space is large, and the continuous rise of volume and price in the future can be expected. 2) In 2020, the revenue of benefits was 1.415 billion (+ 9.9%), the gross profit margin was 38.31% (+ 4pp), and the gross profit margin increased significantly. Tonic products benefit from the completion and operation of two production lines of Beijing Tongrentang Co.Ltd(600085) technology, and the performance is released rapidly. The output of tonic products in 2020 is 76% higher than that in 2019. With the full production capacity of Hebei and Daxing put into operation by the end of 2022, it is expected that Beijing Tongrentang Co.Ltd(600085) technology will maintain a growth of 10% ~ 20% in 2022.
Bonus release of marketing reform: adhere to the marketing idea of “taking variety as the core and terminal as the direction”, create a “4 + 2” business model, and coordinate the development of operation division, terminal division, medical division and medicine and wine division. In 2020, the number of sales personnel will reach 9535, and the per capita sales revenue will be 1.3451 million yuan. In the post epidemic era, the sales team is expected to accelerate the comprehensive implementation of marketing reform. 1) Offline: as of 2021h1, Beijing Tongrentang Co.Ltd(600085) has 900 subordinate commercial stores, with revenue of 4.4 billion yuan (+ 29%) and profit of 2.5 billion yuan (+ 87%). After the rectification of commercial operation in 2019 and the impact of the epidemic in 2020, the company optimized the incentive mechanism, promoted the transformation, upgrading and innovative operation of traditional pharmacies, and ushered in the comprehensive recovery of business quality. 2) Online: take advantage of the growth period of e-commerce development, strengthen the linkage of traditional dealers, self owned retail terminals and Internet market, enable digital transformation, and integrate all channels for development. During the “double 11” period in 2021, Beijing Tongrentang Co.Ltd(600085) shares sold more than 30 million in all varieties, with a year-on-year increase of 31%.
It is estimated that the net profit in 2023 will increase by 36.1% to 23.2% respectively, corresponding to the net profit of 2021-2021.3%, which is expected to increase by 14.8% to 23.2% respectively.
Risk tips: raw material fluctuation risk, pharmaceutical industry policy change risk, global epidemic uncertainty risk.
