\u3000\u3 China Vanke Co.Ltd(000002) 873 Guiyang Xintian Pharmaceutical Co.Ltd(002873) )
The main categories achieved rapid growth, the gross profit margin increased steadily, and the “buy” rating was maintained
On March 24, 2022, the company released its 2021 annual report: in 2021, the company achieved an operating revenue of 970 million yuan, a year-on-year increase of 29.15%; The net profit attributable to the parent company was 101 million yuan, a year-on-year increase of 35.76%; After deducting RMB 3.2 billion from the parent company, the net profit of non parent company increased by 2.94 billion year-on-year. The growth rate of the company’s revenue and profit is in line with our expectations. In terms of categories, the company’s revenue from gynecological products, urinary products and heat clearing and detoxification products has increased. From the perspective of profitability, the increase of gross profit margin of gynecological and urinary products drives the steady increase of overall gross profit margin. We keep the profit forecast of the company unchanged. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 134 million yuan, 171 million yuan and 213 million yuan respectively, corresponding to EPS of 0.80, 1.03 and 1.28 yuan / share respectively. The current share price corresponding to PE is 29.5, 23.1 and 18.5 times respectively. The company takes the lead in the subdivided field of traditional Chinese medicine. The expansion of OTC channels helps speed up the performance, has great growth potential and maintains the “buy” rating.
The equity incentive plan set the goal of doubling revenue for three years, strengthened the determination of development, and steadily promoted the projects invested by raising funds
The equity incentive plan provides power support and measure guarantee for the doubling of three-year revenue. In 2021, the company implemented the equity incentive plan to fully mobilize the work enthusiasm of the core employees of the company through the implementation of the equity incentive plan. Various engineering construction projects of the company have been completed and put into operation. Among them, Guiyang R & D center was completed and put into operation, and the production capacity supply guarantee center helped to upgrade the production capacity. In addition, the construction of “Chinese medicine formula granule” and “gel and mixture production line construction” are still advancing in an orderly way. It is expected that the operation will be carried out in 2023, which is expected to further enhance the company’s capacity and product line expansion.
Sufficient pipeline under research, vigorously expand OTC channels and open up future growth space
The company actively develops new indications with varieties, re evaluates the listed varieties, and selects the drugs with the best clinical efficacy for comparative test, so as to continuously improve the competitiveness of products. In terms of R & D reserves, the company has 3 traditional Chinese medicine products, including long Cen Shu Shu Shu granule, Ku Er Jie Yin gel and Shu Yu Tong granule, and has completed the phase three clinical trial. There are 445 varieties of traditional Chinese medicine formula granules that have entered the clinical research, and 60 have completed the national standard filing; Several classic prescriptions are under research. Through capital increase, huilun biology has gradually arranged the field of small molecular chemical drugs, with great growth potential. Since 2018, the company has vigorously expanded OTC channels, with the goal of increasing the sales proportion of OTC channels to 50% and above. It is expected to further promote product sales, improve profitability and avoid the risk of centralized purchase.
Risk tip: drug research and development failed, channel promotion was not as expected, etc.
