\u3000\u3 China Vanke Co.Ltd(000002) 727 Yixintang Pharmaceutical Group Co.Ltd(002727) )
Core view
The company issued a 21 year performance express, with steady performance growth in the whole year, which was greatly affected by the epidemic in the fourth quarter. In 2021, the company achieved an operating revenue of 14.585 billion yuan, a year-on-year increase of 15.24%; The net profit attributable to shareholders of listed companies was 921 million yuan, a year-on-year increase of 16.65%; After deducting non recurring profits and losses, the net profit attributable to shareholders of listed companies was 897 million yuan, a year-on-year increase of 19.22%. Based on this calculation, in 2021q4, the company achieved an operating revenue of 4.087 billion yuan, a year-on-year increase of 19.57%; The net profit attributable to shareholders of listed companies was 157 million yuan, a year-on-year decrease of 15.59%. From the perspective of the whole year, the company’s revenue and profit have achieved stable growth under the test of the epidemic, and the growth of Q4 revenue has increased slightly, partly due to mergers and acquisitions in the third quarter of last year, but the profit side has declined year-on-year. On the one hand, the operation fluctuates due to the epidemic in Q4 Yunnan and the docking of the medical insurance system. On the other hand, we expect the company to make centralized expenditure on expenses in the fourth quarter, resulting in pressure on the profit side.
In the 21st year, the construction of stores exceeded expectations and was optimistic about the road of expansion in other places. By the end of December 2021, the company had 8560 direct chain stores, with a net increase of 1355 throughout the year, slightly exceeding the market expectation, including a net increase of 204 in the fourth quarter. Specifically, according to the data of the third quarter, the number of new stores opened in Yunnan Province reached 644, and the number of new stores opened outside the province reached 656, which has exceeded the number of new stores in the province, including 214 in Sichuan Province and 143 in Guangxi Province, indicating that the company has stepped up on the road of remote expansion and has become the main battlefield of expansion outside the province. On the other hand, 26 stores were closed in the first three quarters, accounting for only 0.36%. We believe that under the epidemic, the closing rate of drugstore stores has been quite excellent in various retail formats, highlighting the rigidity of drugstore service attributes.
The construction of diversified business has been quite effective. In the direction of professional service capacity, the company has increased the layout of special and chronic disease pharmacies and hospital side stores. As of the first half of the year, the company has arranged 814 stores for all kinds of chronic disease medical insurance, and the number of hospital side stores of hospitals above class II has reached 583; In the direction of business diversification, the company will further expand in the field of drugstore and is expected to speed up in 22 years. After obtaining 609 approvals in 20 years, the formula particle business has preliminarily cooperated and used with more than 200 grass-roots or private customers in 21 years, and has made great achievements in the construction of supply chain.
Profit forecast and investment suggestions
Due to the great impact of the epidemic in 21 years on the company, we lowered our profit forecast. It is estimated that the company’s earnings per share from 2021 to 2023 will be 1.55 yuan, 1.89 yuan and 2.27 yuan respectively (the original forecast earnings per share were 1.72 yuan, 2.14 yuan and 2.60 yuan respectively). According to the comparable company, the PE valuation in 2021 will be 19 times, and the target price will be 29.45 yuan, maintaining the buy rating.
Risk tips
Purchases with volume exceeded expectations, covid-19 epidemic repeated, and store expansion was less than expected
