\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 129 Chongqing Taiji Industry (Group) Co.Ltd(600129) )
Key investment points
Performance summary: in 2021, the company’s revenue reached RMB 12.15 billion, with a year-on-year increase of 8.4%. The net profit attributable to the parent company was RMB – 520 million, and the net profit deducted from non attributable to the parent company was RMB – 700 million.
The profit side is mainly the loss of non main business, and the operating business has improved significantly. In 2021, after the actual controller of the company changed to Sinopharm, the company disposed of non main business and non-profit projects, accrued 360 million yuan of asset impairment reserves, and 140 million yuan of employee set benefit plans, with a cumulative affected profit of about 510 million yuan. After deducting the above factors, deduct 190 million yuan of non parent net profit loss, a decrease of 370 million yuan over the previous year, and the main business was significantly improved. The sales expense rate is 34.7% (+ 1.7pp), the management expense rate is 7.5% (- 0.2pp), the financial expense rate is 1.8% (- 0.7pp), and the R & D expense rate is 0.8%. The decrease in the management fee rate is mainly due to the further improvement of operation and management. The functional departments of the company’s headquarters are reduced from 29 to 20. The subsidiaries in the industrial and traditional Chinese medicine resources sector have reduced 69 team members and the commercial sector has reduced 23 team members. The management efficiency is expected to be further improved.
The industry focuses on the main products, and the subsequent growth can be expected. In 2021, the industrial income of the company was 7.69 billion yuan, with a year-on-year increase of 4.6%. The sales of 13 varieties with more than 100 million yuan, and the main products achieved rapid growth, of which the income of Huoxiang Zhengqi oral liquid was 920 million yuan (+ 33.6%), the income of Jizhi syrup was 280 million yuan (+ 74%), the income of lofenadeine sustained-release tablets (siweipu) was 450 million yuan (+ 25%), the income of Xiaojin tablets was 340 million yuan (+ 30%), the income of morphine hydrochloride sustained-release tablets (mephikon) was 210 million yuan Tongtian oral liquid was 190 million yuan (+ 40%), and sinusitis oral liquid was 130 million yuan (+ 28%). Develop new varieties and add 23 new varieties (including 10 dormant varieties). In the future, we will further strengthen in-hospital marketing, focus on exclusive basic drug varieties, complete multi provincial online bidding, and strengthen academic marketing. It is expected that the volume and price will rise together in 2022. In addition, there are more than 3000 newly developed medical institutions, and the in-hospital market is expected to be further opened.
The 14th five year plan was carried out in an orderly manner, and the annual growth can be expected. In 2022, the operating revenue will strive to increase by 15% year-on-year, of which the pharmaceutical industry will strive to increase by 18% year-on-year, the target growth rate of strategic varieties such as Huoxiang Zhengqi oral liquid and Jizhi syrup will be 50%, and the target growth rate of yibaoshiling, meifeikang, Tongtian oral liquid, sinusitis oral liquid, lofenadine sustained-release tablets and Xiaojin tablets will continue to be 30%. Through endogenous development and extension expansion, the company strives to achieve an operating revenue of 50 billion yuan by the end of the 14th five year plan. From the perspective of endogenous growth, it is expected that the compound growth rate of the income end of the industrial sector will reach 25% – 30% from 2022 to 2025, and the net profit margin is expected to recover to 10%. It is expected that the industry will contribute 1.5-2 billion yuan of net profit in 2025.
The pharmaceutical business grew steadily and the construction of traditional Chinese medicine base was strengthened. In 2021, the company’s commercial income was 7.3 billion yuan, including 5.99 billion yuan in wholesale and 1.31 billion yuan in retail. 1) Distribution: actively introduce national varieties, enrich business varieties, introduce more than 130 suppliers, and add 2471 movable sales regulations. It is estimated that 2000 new product specifications will be added in 2022. The medical network will be developed in 2021, with 55 newly developed grade hospitals and 260 grass-roots medical institutions. The commercial distribution is expected to increase by more than 12% in 2022. 2) In the pharmacy sector, 54 directly operated pharmacies and 89 automatic medicine cabinets have been added. It is expected that the directly operated pharmacies will increase by more than 10% in 2022; 3) Management of traditional Chinese medicine: make every effort to build a number of national influential large variety strategies, and build a number of varieties of traditional Chinese medicine, such as Pinellia ternata, golden buckwheat, Peucedanum, perilla and so on. The planting area and output rank first in the country.
Profit forecast. In view of the rapid improvement of operating performance brought by the entry of Sinopharm into Taiji, excluding the disposal income of some assets in 2022, the net profit attributable to the parent company in 20222024 is expected to be 320 million yuan, 540 million yuan and 730 million yuan respectively, EPS is 58 yuan, 96 yuan and 1.31 yuan respectively, and the corresponding PE in 20222024 is 38 times, 23 times and 17 times respectively.
Risk tips: the cost control is less than expected, the sales of core varieties is less than expected, and the disposal of land assets is less than expected.
