\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 085 Beijing Tongrentang Co.Ltd(600085) )
Main points:
Over 350 years, it has become a big brand
Beijing Tongrentang Co.Ltd(600085) brand was founded in 1669 (the eighth year of Kangxi in the Qing Dynasty) and has a history of 352 years. It is one of the first batch of Chinese time-honored enterprises. In the latest "2021 Hurun brand list with the most historical and cultural heritage in China", Beijing Tongrentang Co.Ltd(600085) is ranked first with full marks, highlighting its own brand value Beijing Tongrentang Co.Ltd(600085) shares belong to Beijing Tongrentang Co.Ltd(600085) (Group), and also directly or indirectly hold two Hong Kong listed companies under the group ( Beijing Tongrentang Co.Ltd(600085) technology, Beijing Tongrentang Co.Ltd(600085) Sinopharm). The three listed companies cover traditional dosage forms, modern dosage forms and overseas sales respectively, and jointly build Beijing Tongrentang Co.Ltd(600085) time-honored brands.
The company completed the core management reform in 2021, and di Shubing, the former general manager of the company, took over as the chairman. Di Shubing, chairman of the board of directors, has served in various business departments of the company with rich experience. The other core management teams are also from business backgrounds and have the ability to promote the further development of the company's business. It was also in 2021 that the company ushered in a rebound in performance. In the first three quarters of 2021, the company achieved an operating revenue of 10.683 billion yuan, a year-on-year increase of 18.00%; The net profit attributable to the parent company was 920 million yuan, a year-on-year increase of 28.67%.
Angong Niuhuang Pill is the absolute leader, and the large variety strategy deepens the market
Angong Niuhuang Pill has always been a well-known variety in traditional Chinese medicine, and Beijing Tongrentang Co.Ltd(600085) is the absolute leader among many competitive enterprises, accounting for 74.5% of the market share in 2019. Moreover, the company has full control over the pricing power of Angong Niuhuang pills. In recent 20 years, Beijing Tongrentang Co.Ltd(600085) three times publicly adjusted the selling price of Angong Niuhuang pills. The most recent time was at the end of 2021. The sales price of Angong Niuhuang pills (3 grams pills / box) was raised from 780 yuan to 860 yuan, an increase of about 10%. With the increasing demand and the cost of traditional Chinese medicine, we believe that Beijing Tongrentang Co.Ltd(600085) Angong Niuhuang Pill is expected to continue to increase its price in the future. The company has a rich number of products, with 400 + perennial varieties of Chinese patent medicines and 27 + dosage forms of Chinese patent medicines. Closely focusing on the big variety strategy, the sales of the top five products continued to pick up. In the first half of 2021, the company achieved a revenue of 2.237 billion yuan from the top five varieties, a year-on-year increase of 22.84%.
The negative factors have been gradually eliminated, and the marketing reform has achieved remarkable results
On the one hand, bad factors are eliminated. The company experienced a painful period in 2019 and 2020, but now it has been gradually eliminated. 1. The impact of honey gate incident was eliminated, and the company handled it timely and effectively; 2. The impact of the epidemic is gradually digested. In the first half of 2020, both industrial and commercial sectors of the company were impacted by the epidemic. With the normalization of the epidemic, the problem of economic production capacity of the company was solved. The business impact was gradually eliminated, and the net profit attributable to the parent company was 1.031 billion yuan in 2020, with a year-on-year increase of 4.67%. 3. The capacity problem has been solved. In 2020, the subsidiary Beijing Tongrentang Co.Ltd(600085) technology was located in Daxing production base and Tangshan base and officially put into operation, and the production and supply pressure of some products was gradually relieved.
On the other hand, the marketing reform has achieved remarkable results. The company's sales team started the marketing reform in 2020, continued to adhere to the guiding ideology of "taking variety transportation as the core and terminal work as the direction", and created the business model of "4 + 2" (four business divisions and two special teams). This has reduced the dealer level, reasonably distributed channel profits, and directly connected to the terminal pharmacy to improve the sales enthusiasm of the pharmacy. Since the reform, the year-on-year growth rate in the third quarter of 2020 has become positive and has continued to grow. The first three quarters of 2021 have increased by 22% / 23% / 9% respectively year-on-year, and the company's revenue has improved quarter by quarter.
Investment advice
We expect that the company's revenue from 2021 to 2023 will be RMB 15.0/173.2/19.71 billion respectively, with a year-on-year increase of 16.9% / 15.5% / 13.8% respectively, and the net profit attributable to the parent company will be RMB 13.0/15.2/1.75 billion respectively, with a year-on-year increase of 26.0% / 17.3% / 14.6% respectively, corresponding to EPS of RMB 0.95/1.11/1.27 from 2021 to 2023, with a corresponding valuation of 49x / 42x / 37x. For the first time, the "buy" investment rating is given.
Risk tips
Price fluctuation of raw materials; The price increase of core varieties is less than expected; Marketing reform was less than expected.
