\u3000\u30 Shenzhen Fountain Corporation(000005) 38 Yunnan Baiyao Group Co.Ltd(000538) )
Events
The company released its annual report for 2021, and achieved an operating revenue of 36.374 billion yuan in 2021, with a year-on-year increase of 11.09%; The net profit attributable to shareholders of listed companies was 2.804 billion yuan, a year-on-year decrease of 49.17%; The net profit excluding non recurring profit and loss was 3.339 billion yuan, a year-on-year increase of 15.17%; The basic earnings per share is 2.21 yuan. It is proposed to distribute cash dividends of 16 yuan (including tax) for every 10 shares and 4 bonus shares (including tax).
Comments
The revenue side grows healthily, and the profit side is affected by investment profit and loss
The industrial income was 12.703 billion yuan, with a year-on-year increase of 8.42%, and the gross profit margin was 63.98%, with a year-on-year increase of 2.8 percentage points; The wholesale and retail revenue was 23.581 billion yuan, a year-on-year increase of 12.43%, and the gross profit margin was 7.31%, a year-on-year decrease of 1.78 percentage points.
Net profit is mainly affected by investment income. The company’s profit and loss from changes in fair value in 2021 decreased by about 1.929 billion yuan, mainly due to changes in the net value of securities and fund units held. However, the company is also subtracting investment. The overall investment amount (including equity investment, non equity investment and financial asset investment) decreased from 28.133 billion yuan at the end of 2020 to 6.896 billion yuan at the end of 2021, a year-on-year decrease of 75.49%.
In addition, the share based payment expenses arising from the implementation of the employee stock ownership plan in 2021 are included in the company’s costs, with relevant expenses of 813 million yuan and capital reserve of 113 million yuan.
The operating cash flow increased brightly and may be affected by the epidemic in the fourth quarter
The overall gross profit margin of the company was 27.15%, with a year-on-year increase of -0.60 percentage points; The expense rate during the period was 13.88%, with a year-on-year increase of -0.18 percentage points; Among them, the sales expense rate was 10.71%, with a year-on-year increase of -0.88 percentage points; The management fee rate was 3.88%, with a year-on-year increase of + 0.70 percentage points; The financial expense rate was -0.71%, with a year-on-year increase of -0.00 percentage points; The net operating cash flow was 5.223 billion yuan, a year-on-year increase of + 36.42%.
Quarterly, the company’s Q1-Q4 single quarter revenue was 10.328 billion yuan, 8.755 billion yuan, 9.279 billion yuan and 8.011 billion yuan respectively, with a year-on-year growth rate of + 33.38, + 12.97, + 9.98 and – 9.08% respectively. The Q1-Q4 single quarter net profit attributable to the parent company was 763 million yuan, 1.039 billion yuan, 649 million yuan and 353 million yuan respectively, with a year-on-year growth rate of – 40.48, -11.36, -63.94 and – 72.05% respectively. The Q1-Q4 single quarter net profit deducted from non attributable to the parent company was 1.365 billion yuan, 5.20 million yuan, 1.046 billion yuan and 407 million yuan respectively, with a year-on-year growth rate of + 29.42 and -34.50、-21.70、+242.41%。
Solid progress was made in the main business of each section to help the steady implementation of the “1 + 4” second growth curve strategy
Main basic business and lay a solid foundation. Pharmaceutical business department: with the pharmaceutical operation center as the core and the device operation center and new channel operation center as the two wings. Health Products Division: under the circumstance that the growth rate of the industry slows down, the toothpaste category will still gain more than 23% of the market share in 2021 and maintain the first position in the market share of the industry. Traditional Chinese Medicine Resources Division: it has created strategic varieties including Paris polyphylla, Panax notoginseng and industrial marijuana. Provincial pharmaceutical companies: strive for the main distribution channel, ensure the steady growth of sales, seize the opportunity of hospital development and variety introduction, and expand the distribution share.
Explore the second growth curve, focus on the solutions of traditional Chinese medicine, oral intelligent care, dermatology, orthopedics and women’s care, and constantly update and iterate the product echelon. The new retail health service competition was close to 4 million, and the online and offline repurchase rates increased simultaneously. In terms of academic support, in 2021, the project team became a strategic partner with the Department of medicine of Peking University, and reached a preliminary cooperation intention in R & D, transformation and clinical application on the cooperation of “industry, University, research and medicine” in the field of skin disease treatment and medical beauty. In the second half of 2021, the Shanghai International Center project with a total investment of about 1.55 billion yuan was fully started. After completion, it will undertake the functions of Yunnan Baiyao Group Co.Ltd(000538) international operation center, R & D center and so on.
Participate in Shanghai Pharmaceuticals Holding Co.Ltd(601607) non-public offering. In 2021, the company reached equity cooperation and strategic cooperation between the two sides by participating in the subscription of Shanghai Pharmaceuticals Holding Co.Ltd(601607) non-public offering of a shares, and coordinated with Shanghai Pharmaceuticals Holding Co.Ltd(601607) high-quality platform and industrial resources. The company intends to participate in the subscription of 666 million A-share non-public offering in Shanghai Pharmaceuticals Holding Co.Ltd(601607) 2021 in cash, with the subscription amount not exceeding RMB 11.230 billion. After the completion of this transaction, the company will hold Shanghai Pharmaceuticals Holding Co.Ltd(601607) 1802% equity.
Investment advice
Due to the update of the company’s annual report, the previous profit forecast was adjusted. We expect that the company’s revenue from 2022 to 2024 will be 40.76/456.1/51.01 billion yuan respectively, with a year-on-year increase of 12.0% / 11.9% / 11.8%, the net profit attributable to the parent company will be 47.0/52.9/5.72 billion yuan respectively, with a year-on-year increase of 67.5% / 12.7% / 8.0%, the corresponding EPS will be 3.66/4.13/4.46 yuan, and the corresponding valuation will be 22x / 20x / 18x. Excluding the impact of investment profit and loss, it is estimated that the net profit attributable to the parent company after deducting non profits from 2022 to 2024 will be RMB 4.70/5.03/5.26 billion, with a year-on-year growth rate of 41% / 7% / 5%. Maintain the “overweight” investment rating.
Risk tips
The fluctuation of product price is lower than expected, the investment income is lower than expected, and the performance of toothpaste and big health products is lower than expected.
