\u3000\u3 China Vanke Co.Ltd(000002) 727 Yixintang Pharmaceutical Group Co.Ltd(002727) )
Performance review
On March 29, the company released its annual report for 2021, which realized a revenue of 14.587 billion yuan (+ 15%), a net profit attributable to the parent company of 922 million yuan (+ 17%), and a net profit not attributable to the parent company of 899 million yuan (+ 19%).
In a single quarter, in 2021q4, the company achieved a revenue of 4.089 billion yuan (+ 20%), a net profit attributable to the parent company of 158 million yuan (- 15%), and a net profit not attributable to the parent company of 151 million yuan (- 13%).
Business analysis
The high-density strategy of small regions was steadily promoted, and the overall performance grew steadily. In 2021, the company’s performance increased steadily, realizing a total operating revenue of 14.59 billion yuan (+ 15.26%), including 10.49 billion yuan (+ 19%) of Chinese and Western patent medicines; The income from medical devices, family planning and disinfection supplies was 1.21 billion yuan (- 11%); Among them, the income of traditional Chinese medicine increased rapidly by 1.36 billion yuan (+ 21%). In 2021, the scale of the company’s stores was further developed, with a total of 8560 stores, an increase of 1355 over the beginning of the year, including 4939 stores in Yunnan Province.
Continue to strengthen member management and continuously improve business efficiency. As of the annual report of 2021, the current number of effective members of the company has reached 30 million (+ 25%), an increase of 2 million compared with 3q2021. In 2021, the member customer unit price was 95.37 yuan, and the consumption of single member accounted for 35.95%, an increase of 3.23 percentage points over 2020. The company continues to strengthen its professional service ability, accurately analyze members’ needs and medication habits, and attract potential customers and enhance the company’s profitability through the development of new members and the expansion of the company’s brand influence. The year-on-year (- 21%) of administrative expenses is the company’s continuous improvement of operating efficiency, and the R & D expenses (+ 542%) are the investment in the key technology, quality standard research and production demonstration of the processing of formula granules of important genuine medicinal materials in Yunnan.
The production capacity of the traditional Chinese medicine sector continues to expand and the industrial chain is gradually improved. In January 2022, the company officially established the national and provincial standard process validation project team for traditional Chinese medicine formula granules, and undertook the process validation and filing of 307 traditional Chinese medicine formula granules currently released. In the future, it will benefit from the advantages brought by mature technology and market expansion, which is expected to further increase in large quantities, and further improve the gross profit margin of Yixintang Pharmaceutical Group Co.Ltd(002727) traditional Chinese medicine products.
Profit adjustment and investment suggestions
We are optimistic about the continuous volume of each section of the company. It is expected that the company will realize the net profit attributable to the parent company of RMB 1.17 billion, 1.43 billion and 1.71 billion from 2022 to 2024, with a year-on-year increase of 27%, 21% and 20% respectively. Maintain the “buy” rating.
Risk tips
Risk of substitution of new materials and technologies; New product R & D risk; New product registration risk; Risk of core personnel turnover; Risk of decline in net interest rate; The risk of intensified industry competition;
