\u3000\u3 Shengda Resources Co.Ltd(000603) 883 Lbx Pharmacy Chain Joint Stock Company(603883) )
Event:
On March 6, the company announced that it planned to acquire 71.96% equity of Hunan Huairen Great Health Industry Development Co., Ltd. with its own capital of RMB 1.637 billion. Before the completion of this transaction, Lbx Pharmacy Chain Joint Stock Company(603883) holds 4.16% of the equity of the target company, and will hold 76.12% of the equity of Hunan Huairen dahealth after the completion of this transaction.
Event comments:
The acquisition valuation is relatively reasonable, and the acquiree promises a 3-year compound growth rate of 20% in net profit. According to the target company's annual net profit of 100 million yuan in 2020, the P / E ratio of this transaction is 22.75 times. It is lower than or close to the P / E ratio of emerging pharmacies with similar scale, 28.34 times of Chengda Fangyuan and 22.42 times of Huatuo pharmacy (terminated). The transaction is expected to form a new goodwill of about 1.441 billion yuan. The amount of goodwill in the financial statements of the company on September 30, 2021 is RMB 3.638 billion. After the completion of this transaction, the accumulated goodwill of the company is expected to reach RMB 5.079 billion. In addition, Hunan Huairen promises that the annual net profit from 2022 to 2024 will not be less than 110 million yuan, 131 million yuan and 152 million yuan respectively. The average annual compound growth rate of performance from 2021 to 2024 is about 20.17%.
Huairen, Hunan, is deeply rooted in Western Hunan, with excellent store quality and great potential. Hunan Huairen is the most influential retail chain drugstore in Western Hunan, with sales of 1.402 billion yuan in 2020; Now it has more than 660 direct drugstores, which are distributed in Huaihua, Xiangxi Autonomous Prefecture, Shaoyang, Zhang Jia Jie Tourism Group Co.Ltd(000430) and other Western Hunan regions and Guizhou. Its drug sales scale and brand effect are among the best. It has the first total market share in the above western Hunan region and has a good market reputation and reputation. The operation quality of its stores is excellent. In the future, it can continue to strengthen the depth of market layout through the expansion of store network, which has development potential.
Consolidate the leading position of the company in Hunan Province and further improve its profitability. After the completion of the transaction, Lbx Pharmacy Chain Joint Stock Company(603883) will become the pharmaceutical retail chain enterprise with the largest number of stores in Hunan Province, ranking first in the number of stores in 7 of the 14 prefectures and cities in Hunan Province. The influence and appeal of the company as an industry leader are further highlighted. This will effectively fill the relatively blank area of the company's marketing network coverage in Hunan, effectively form a regional joint force, further expand the company's market in Hunan and improve its market share.
Profit forecast and investment suggestions
As the company continues to expand its market share through extensive mergers and acquisitions, regardless of the impact of consolidation after the acquisition, we expect the company's operating revenue of 15.8/19.54/24.18 billion yuan and net profit attributable to the parent company of 69 / 8.5/1.09 billion yuan from 2021 to 2023. At present, the stock price corresponds to 25 / 20 / 15 times PE and maintains the rating of "overweight".
Risk tips
The development after the acquisition is less than expected; The outflow of prescriptions did not meet expectations; The negative impact of volume purchase on the variety price of drugstores; The impact and uncertainty of online pharmacies on offline pharmacies; Goodwill impairment risk.
