\u3000\u3 China Vanke Co.Ltd(000002) 727 Yixintang Pharmaceutical Group Co.Ltd(002727) )
Core view
The performance of the whole year was stable, and it was greatly affected by the epidemic in the fourth quarter. 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%; The net profit attributable to the parent company after deduction was 899 million yuan, a year-on-year increase of 19.41%, and the annual performance grew steadily. 21q4, the company achieved 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 15.41%; The net profit attributable to the parent company after deduction was 151 million yuan, a year-on-year decrease of 12.90%. In terms of business, the company’s retail business achieved an operating revenue of 12.351 billion yuan in the whole year of 21 years, with a year-on-year increase of 5.15%; Wholesale business reached 1.924 billion yuan, a year-on-year increase of 193.68%, mainly due to mergers and acquisitions. The gross profit margin of the company’s sales in the whole year of 21 years was 36.96%, with a year-on-year increase of 1.14 PCTs, and the net profit margin of sales was 6.29%, with a year-on-year increase of 0.05 PCTs.
Stores still maintain high growth, and the achievements of remote expansion strategy are remarkable. By the end of the 21st century, the company had 8560 retail pharmacies, including 4939 pharmacies in Yunnan, 1100 pharmacies in Sichuan, 307 pharmacies in Chongqing, 835 pharmacies in Guangxi and 580 pharmacies in Shanxi; In 21 years, 1355 new stores were added, 655 new stores were added in Yunnan Province, and 700 new stores were added outside the province. The expansion scale outside the province has exceeded that in Yunnan Province, and the remote expansion strategy continues to be implemented. It is worth mentioning that the total number of stores in Sichuan and Chongqing has reached 1407, a total of 253 new stores have been added, and the growth rate of stores has reached 21.92%, especially in Sichuan. We expect that in the next 1-3 years, Sichuan and Chongqing will shift from contributing revenue to contributing profit, and the growth engine brought by remote expansion will appear soon.
Diversified business continues to expand, and the construction of specialized pharmacy has reached a higher level. In 2021, the company’s online business revenue was 380 million yuan, of which o2o accounted for 80.28%. The number of o2o business stores totaled 8291, an increase of 72.16% over the same period last year, and the coverage rate was as high as 96.86%. By the end of the period, the company had opened 831 chronic disease medical insurance stores and 623 hospital side stores. Chronic disease medical insurance stores accounted for nearly 10% of the total number of stores in the group. The sales of prescription drugs increased by 6.13% year-on-year, faster than the overall retail growth, and the outflow of prescriptions continued.
Profit and investment forecast
Considering that the recent epidemic is still serious, we expect that the company’s operating level will still be affected in 22-23 years. We have lowered our profit forecast. It is estimated that the company’s earnings per share in 20222024 will be 1.77 yuan, 2.02 yuan and 2.32 yuan respectively (the original earnings per share in 22-23 years are 1.89 yuan and 2.27 yuan respectively). According to the comparable company, we will give a PE valuation of 14 times in 2022, corresponding to the target price of 24.78 yuan, and maintain the buy rating.
Risk tips
Purchases with volume exceeded expectations, covid-19 epidemic repeated, and store expansion was less than expected
