\u3000\u30 Shenzhen Fountain Corporation(000005) 38 Yunnan Baiyao Group Co.Ltd(000538) )
Event: in 2021, the company realized an operating revenue of 36.37 billion yuan, an increase of 11.1% year-on-year, and the net profit attributable to the parent company was 2.8 billion yuan, a decrease of 49.2% year-on-year. The net profit deducted from non attributable to the parent company was 3.34 billion yuan, an increase of 15.2% year-on-year. In terms of quarterly net income of RMB 1.34 billion (+ 1.34 billion yuan) and non-q1 net profit of RMB 1.34 billion (+ 1.03 billion yuan) and Q2 net profit of RMB 1.03 billion (+ 1.03 billion yuan), respectively (- 1.02 billion yuan) of RMB 1.34 billion (+ 1.03 billion yuan) and (- 1.02 billion yuan).
Restore non recurring profit and loss, and the profit growth of main business is bright. The total non recurring profit and loss of the company is – 540 million yuan, mainly including investment income of – 1.35 billion yuan, profit and loss on disposal of non current assets of 620 million yuan, government subsidy of 180 million yuan, etc. in addition, there are 550 million yuan of share based payment expenses in management expenses. If the net profit not attributable to the parent is deducted and the impact of share based payment is excluded, the net profit of the company’s main business is 3.89 billion yuan, a year-on-year increase of 29%. In the future, the company will further focus on its main business, take the initiative to reduce the investment scale of trading financial assets and reduce the volatility of investment income.
The “1 + 4 + 1” strategy has been steadily promoted, and the second curve of new business development. By business segment, the industrial revenue was 12.7 billion yuan (+ 8.4%), and the commercial revenue was 23.58 billion yuan (+ 12.4%). 1) Great health division: in 2021, the revenue was 5.91 billion yuan, a year-on-year increase of 9.7%, the net profit was 2.26 billion yuan, and the net profit margin reached 38%, an increase of 3.1pp. We expect the net profit margin to increase significantly, mainly due to the rapid increase in the online proportion of toothpaste, and the price of new toothpaste series drives the overall price to move up. The market share of toothpaste exceeded 23%, ranking first in market share for four consecutive years. The annual revenue of yangyuanqing series products increased by more than 60%, realizing a revenue of more than 100 million yuan, and the goal of achieving a revenue of 300 million yuan in 2022. In 2021, the company achieved initial results in the layout of medical beauty, oral care, new retail health services and dermatology. Oral care has launched a number of brand-new products, Yunnan Baiyao Group Co.Ltd(000538) oral mouthwash, and the first real-time mixed tooth flushing device – Yunnan Baiyao Group Co.Ltd(000538) intelligent tooth flushing device. 2) Deeply cultivate the development of traditional Chinese medicine, raise the price of Yunnan Baiyao Group Co.Ltd(000538) powder by 13.5%, and further tap the potential around the existing varieties. In the future, we will strengthen the research and development of innovative traditional Chinese medicine. In March 2021, the company’s class 1.1 innovative traditional Chinese medicine quansanqi tablet was approved for clinical use, and will continue to promote the listing of a number of innovative traditional Chinese medicine in the future.
Increase investment in innovation and innovation driven development. In 2021, the R & D expenditure was 330 million yuan, an increase of 83% year-on-year, and the construction of R & D center was increased Yunnan Baiyao Group Co.Ltd(000538) Shanghai International Center was officially started in the second half of 2021, with a total investment of 1.55 billion yuan. After completion, it will undertake the functions of Yunnan Baiyao Group Co.Ltd(000538) international operation center, R & D center and so on. Peking University – Yunnan Baiyao Group Co.Ltd(000538) Xi’An International Medical Investment Company Limited(000516) Research Center was officially inaugurated to carry out project cooperation around the strategic track determined by the company, and carry out cooperation in five fields: Oncology, trauma orthopedics, pharmacy, stomatology and medical cosmetology.
Constant increase Shanghai Pharmaceuticals Holding Co.Ltd(601607) continued to advance. In March 2022, the company decided to increase Shanghai Pharmaceuticals Holding Co.Ltd(601607) with the approval of the CSRC, invested 14.38 billion yuan and sent two directors to the Shanghai Pharmaceuticals Holding Co.Ltd(601607) board of directors. With the help of Shanghai Pharmaceuticals Holding Co.Ltd(601607) high-quality platform and industrial resource coordination, further amplify Yunnan Baiyao Group Co.Ltd(000538) existing resource advantages, grasp the important opportunity of industrial integration, expand the scale of main business and the layout of existing industries, and improve the overall operation efficiency. Through the integration and coordination in regional complementarity and logistics warehousing, purchase and price negotiation, variety agency, brand promotion, new drug development and other aspects, it is conducive to expand the scale of main business and improve the operation efficiency, Enhance the core competitiveness and profitability of enterprises.
According to the profit forecast and investment suggestions, the net profit attributable to the parent company from 2022 to 2024 is expected to be 4.2 billion yuan, 4.8 billion yuan and 5.5 billion yuan respectively, and the corresponding PE is 25 times, 22 times and 19 times respectively. Considering the continuous improvement of the company’s four major businesses, the stable leading position of orthopedics and traumatology drugs, the equity incentive plan to stimulate the enthusiasm of employees, and the continuous implementation of new products and projects in the field of toothpaste and skin care, the company’s future growth can be expected.
Risk warning: fluctuation risk of profit and loss due to changes in fair value, product sales or failure to meet expectations.
