\u3000\u3 China Vanke Co.Ltd(000002) 727 Yixintang Pharmaceutical Group Co.Ltd(002727) )
Matters:
The company released the annual report of 2021, and the annual revenue of 2021 was 14.587 billion yuan (+ 15.26%); The net profit attributable to the shareholders of the listed company was 922 million yuan (+ 16.66%); Deduct non net profit of 899 million yuan (+ 19.41%). The growth rate of the company is in line with expectations. In the fourth quarter and single quarter, the company realized revenue of 4.089 billion yuan (+ 19.65%); The net profit attributable to the shareholders of the listed company was 158 million yuan (- 15.14%); Deduct non net profit of 151 million yuan (- 12.90%). It is proposed to distribute a cash dividend of 3.00 yuan (including tax) for every 10 shares and 0 bonus shares (including tax), and do not use the accumulation fund to increase the share capital.
Ping An View:
The expansion of stores was strengthened and the number of stores increased steadily: the company continued to expand. During the reporting period, the company built 1603 new stores, closed 92 stores and relocated 156 stores due to urban transformation and strategic location adjustment, resulting in a net increase of 1355 stores and 8560 direct chain stores. The company continues to work in Sichuan and Chongqing, and the number of stores has exceeded 1400 at the end of the period. The layout of the company’s stores continues to deepen and sink. With the improvement of the consumption capacity of grass-roots residents, the long-term development of the company can be expected.
The number of medical insurance stores of the company continued to increase, and the ability to undertake prescriptions was enhanced: as of December 31, 2021, 7426 pharmacies had obtained the qualification of “designated retail pharmacies of medical insurance”, accounting for 86.75% of the total number of pharmacies of the company. The proportion of medical insurance stores increased by 0.63 percentage points compared with the previous year. During the reporting period, the proportion of the company’s medical insurance card sales in the total sales was 43.80%, an increase of 1.99 percentage points over 2020. The company has 831 chronic disease medical insurance stores, accounting for nearly 10% of the total number of stores in the group. The ability of medical insurance companies to undertake prescriptions and open medical insurance stores will be further improved.
The efficiency of the company was improved, and the net profit margin was higher than that of the same period last year: the gross profit margin in 2021 was 36.96%, an increase of 1.14 percentage points compared with the same period last year. We believe that the increase of the company’s gross profit margin is mainly caused by the increase of the sales proportion of traditional Chinese medicine products. The overall operation of the company is good. The sales expense rate and management expense rate are 25.37% and 2.73% respectively, an increase of 1.25% and a decrease of 1.27 percentage points respectively over the same period last year. The increase of the company’s gross profit margin was superimposed on the decrease of the management fee rate, and the net profit margin reached 6.29%, an increase of 0.05 percentage points over the same period last year.
Maintain the “recommended” rating: as the chain drugstore with the highest market share in Southwest China, the card position advantage of the company is becoming more and more obvious. The restricted stock incentive plan will effectively stimulate the motivation of the company’s new management and promote the accelerated growth of performance. Considering the impact of the epidemic on the company’s performance, we lowered our profit forecast (the original forecast was 2.01/2.45 yuan for EPS from 2022 to 2023 respectively), and the company’s EPS is expected to be 1.87/2.25/2.72 yuan from 2022 to 2024, maintaining the “recommended” rating.
Risk tips: 1) policy risk: the stricter supervision of the drug circulation industry may have an impact on the company’s short-term performance. 2) Risk of intensified competition: Merger and integration of pharmacy industry, increased concentration, intensified competition or impact on the company’s performance. 3) Epidemic risk: the occurrence of the epidemic may affect the sales of some drugs, thus affecting the company’s performance.
