\u3000\u3 China Vanke Co.Ltd(000002) 727 Yixintang Pharmaceutical Group Co.Ltd(002727) )
Event:
On March 30, 2022, the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 14.587 billion yuan, a year-on-year increase of 15.26%; The net profit attributable to the parent company was 922 million yuan, a year-on-year increase of 16.66%. In 2021q4, the company realized an operating revenue of 4.089 billion yuan, a year-on-year increase of 19.65%; The net profit attributable to the parent company was 158 million yuan, a year-on-year decrease of 15.14%.
Comments:
The performance increased steadily. The new leasing standards led to the increase of financial expenses. The performance of the company increased steadily in 2021, of which the income of Chinese and Western patent medicine products was 10.491 billion yuan, a year-on-year increase of 18.72%; The revenue of medical devices, family planning and disinfection products reached 1.209 billion yuan, a year-on-year decrease of 11.01%, mainly due to the impact of covid-19 pneumonia epidemic in 2020 and the rapid growth of sales of disinfection products and medical devices, resulting in a large base; The revenue of traditional Chinese medicine products reached 1.359 billion yuan, a year-on-year increase of 21.21%, accounting for 9.32% of the total revenue. In 2021, the company’s financial expenses were 101 million yuan, with a year-on-year increase of 232650%, mainly due to the increase of lease interest expenses caused by the implementation of the new lease standards. Focus on markets outside Yunnan Province and continue to accelerate store expansion
By the end of 2021, the number of stores of the company had increased by 1355, and the total number of stores had reached 8560, including 655 in Yunnan Province and 4939 in total; A net increase of 700 stores outside the province, the total number of stores outside the province reached 3621, and the number of stores outside the province accounted for 42.30%. The company continues to strengthen the integrated layout, and has exceeded 1600 stores in four types of markets: provincial capital level, prefecture level, county level and township level, forming a unique integrated development pattern of cities, counties and townships in the industry. Provincial and prefecture level stores form a central radiation from the dimensions of brand, goods, services and logistics, play a leading and exemplary role in the consumption of people in the county market, and are more conducive to the establishment of competitive barriers and cost advantages in markets at all levels.
Create diversified business and continuously improve professional service ability
The company continued to build diversified businesses and focused on promoting the construction of cosmetic stores in 2021. The number of cosmetic stores in Yunnan Province was nearly 300. The sales of personal care products of the company increased by 9.63% year-on-year, of which the sales of personal care products of cosmetic stores in Yunnan Province increased by 40.43% year-on-year. At the same time, the company continued to improve the service capacity of the special chronic disease pharmacy. By the end of 2021, the company had opened 831 chronic disease medical insurance stores, accounting for nearly 10% of the total number of stores in the group.
Profit forecast and rating
As a leading enterprise of chain drugstores, the company’s performance is expected to maintain steady growth. According to the performance of the company’s annual report in 2021, the net profit forecast for 20222023 is lowered from 1.247/1.58 billion yuan to 1.111/1.358 billion yuan, and the net profit forecast for 2024 is 1.662 billion yuan, maintaining the “buy” rating.
Risk tips: the risk of expansion outside the province is less than expected, the risk of epidemic impact, the risk of intensified market competition, and the risk of changes in industrial management policies
