\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 129 Chongqing Taiji Industry (Group) Co.Ltd(600129) )
Event: the company released its annual report for 2021. In 2021, it achieved a revenue of RMB 12.15 billion, with a year-on-year increase of 8.4%. The net profit attributable to the parent was RMB 520 million and the net profit not attributable to the parent was deducted by RMB 700 million.
The main business has been improved, and a large amount of impairment has been accrued. In 2022, young clothes will enter the battle. After Sinopharm became the owner in 2021, it cleaned up the non main business and non-profit projects of the company according to the strategic plan and planned to suspend some projects. Therefore, the impairment provision of assets with signs of impairment was 370 million yuan, and the employee set benefit plan was 140 million yuan, with a cumulative impact on the profit of about 510 million yuan. After deducting the above factors, the net profit loss attributable to the parent company is about 190 million, a decrease of 370 million yuan compared with 2022, and the main business has been greatly improved. After the provision for impairment, it will help the company start the journey of the 14th five year plan in 2022.
The entry of Sinopharm into the main body has been completed, and the governance and rectification have achieved initial results. After taking the helm, Sinopharm has formulated clear plans for the company’s personnel structure, incentive mechanism and strategic positioning: 1) streamline the organizational structure and staffing, reduce the functional departments of the company’s headquarters from 29 to 20, re employ the leaders of subsidiaries, reduce 69 people in the industrial and related resource board, 23 people in the commercial board and more than 300 people in the whole company; 2) Reshape the management and control mode of subsidiaries, establish a “strategy + operation” management and control mode, reformulate the contractual salary and performance management measures of the company and its subsidiaries at all levels, and fully implement the tenure system and contractual management of managers; 3) Start the reform of industrial marketing system, with the goal of building “sales Iron Army + major profit contributors”, optimize the allocation of sales force, integrate the national sales market, rearrange the sales team, and make every effort to improve the efficiency and efficiency of sales force.
The industrial sector focused on the main varieties, and the sales increased steadily. In 2021, the company’s pharmaceutical industry realized a revenue of 7.69 billion yuan (not offset), a year-on-year increase of 4.6%; The commercial sector achieved revenue of 7.3 billion yuan (not offset). Among them, 5.99 billion yuan is for pharmaceutical wholesale and 1.31 billion yuan is for pharmaceutical retail. The industrial sector of the company adheres to the development strategy of main varieties. The sales revenue of the top 100 varieties increased by 18% year-on-year, 34 varieties increased by more than 30%, and 13 products with a single product sales of more than 100 million yuan: including Huoxiang Zhengqi oral liquid 920 million (+ 33.6%); Acute branch syrup 280 million (+ 74%); Lofenadine sustained release tablets (siweipu) 450 million (+ 25%); Small gold chip 340 million (+ 30%); Morphine hydrochloride sustained release tablets 210 million (+ 17%); Tongtian oral liquid 190 million (+ 40%); Sinusitis oral liquid (+ 1.28 billion yuan); Liuwei Dihuang Pill 110 million yuan (+ 28%).
Profit forecast and investment suggestions: with the gradual improvement of corporate governance, the revenue and performance are expected to increase steadily, and the sales expenses and R & D investment may increase gradually. It is expected that the company will achieve a revenue of 14.18/17.04/20.54 billion yuan and a net profit attributable to the parent company of 360 / 5.5/850 million yuan from 2022 to 2024. Taiji’s corporate governance and product sales capacity will be further improved after the entry of Sinopharm. At the same time, with reference to the valuation of similar companies in the industry and the company’s previous valuation, Taiji will give the company 25-35 times PE valuation in 2023, with a reasonable range of 24.75-34.65 yuan, maintaining the “buy” rating.
Risk tip: product sales are less than expected, governance optimization is less than expected, and cost control is less than expected
