\u3000\u3 China Vanke Co.Ltd(000002) 727 Yixintang Pharmaceutical Group Co.Ltd(002727) )
Event: on the evening of March 29, the company released its annual report for 2021. During the reporting period, the company achieved revenue of 14.585 billion yuan (+ 15.24%), net profit attributable to parent company of 921 million yuan (+ 16.65%), and net profit attributable to non parent company of 897 million yuan (+ 19.22%). Among them, Q4 achieved a revenue of 4.087 billion yuan (+ 19.57%), and a net profit attributable to the parent company of 157 million yuan (- 15.59%).
Q4 performance is under pressure, the annual performance growth is stable, and the profitability has been enhanced. Quarter by quarter, Q1-Q4 company achieved revenue of RMB 34.29/32.73/37.97/4.087 billion respectively, with a year-on-year increase of 11.07% / 11.25% / 18.29% / 19.57%, and the growth rate of revenue accelerated quarter by quarter; The net profit attributable to the parent company was 261 million yuan, 263 million yuan, 240 million yuan and 157 million yuan respectively, with a year-on-year increase of 27.28%, 24.42%, 27.83% and – 15.59%. The Q4 performance was under pressure, which was mainly affected by the accrued expenses according to the leasing standards. Throughout the year, the company’s performance maintained steady growth under various factors such as covid-19 epidemic affecting commodity display and opening activities. The gross profit margin increased by 1.14pct to 36.96%, the net profit margin increased by 0.05pct to 6.29% year-on-year, and the profitability was enhanced.
In terms of business, the company’s retail business realized revenue of 12.351 billion yuan (+ 5.15%), gross profit margin of 40.32% (+ 3.89%), wholesale business realized revenue of 1.924 billion yuan (+ 193.68%), and gross profit margin of 8.97% (- 0.4%). In terms of products, the company’s income from Chinese and Western patent medicines, medical devices and family planning / disinfection supplies, traditional Chinese medicine and other products was 10.491 billion yuan, 1.309 billion yuan and 1.215 billion yuan respectively, with a year-on-year increase of 18.72%, – 11.01%, 21.21% and 12.08%, accounting for 72%, 8%, 9% and 8% respectively.
Store expansion accelerated and continued to promote the integrated store group of cities, counties and townships. As of December 31, 2021, the total number of Direct stores of the company was 8560, with a net increase of 1355 stores (939 in the same period last year), and the expansion of stores accelerated. Among them, Q4 has a net increase of 204 stores (294 in the same period last year). The newly opened stores are mainly concentrated in Yunnan, Sichuan and Chongqing, Guangxi, Shanxi and Guizhou, and continue to consolidate regional advantages. The company adheres to the layout strategy of high-density online stores in few regions, and has three-dimensional and in-depth layout at provincial capital level, prefecture level, county level and township level. There are more than 1600 market stores at provincial level, prefecture level, county level and township level, forming a unique integrated development pattern of cities, counties and townships in the industry. The logic behind it is that the store group effect can not only increase the synergy between stores, but also form the regional brand competitiveness. The small regional high-density layout has certain advantages in many aspects, such as brand efficiency, logistics distribution, medication habits, talent reserve and so on. In 2021, the sales of provincial capital level, prefecture level, county level and township level stores accounted for 29.51%, 31.83%, 25.02% and 13.63% respectively. Among them, the net interest rate of township level stores was the highest, mainly because the rent cost was lower than that in other regions.
Adhere to the Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration strategy, accelerate the layout of o2o business in existing stores and outlets, and continue to expand new business types. The company adheres to the Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration strategy, continues to promote the 020 business layout of existing stores, and focuses on promoting the sales scale of home o2o self-supporting business. During the reporting period, the number of o2o business stores reached 8291, the coverage rate reached 96.86% of the total number of stores, and o2o business accounted for 80.28% of the overall e-commerce business sales (the total e-commerce sales was 380 million yuan). The company has identified 020 business as the core business operation of e-commerce, and the business process continues to be optimized. In addition, the lottery business and cosmetic business have developed rapidly, and the number of cosmetic stores in Yunnan Province has reached 300.
Investment suggestion: we estimate that the net profit from 2022 to 2024 will be RMB 1.093/13.42/1.613 billion respectively, with a year-on-year growth rate of 18.56% / 22.84% / 20.18% and EPS of 1.83 yuan / 2.22 yuan / 2.71 yuan respectively, corresponding to 13 times, 10 times and 9 times of the current share price. The company’s operating efficiency has been improved, its regional advantages have been continuously consolidated, and its performance growth has been stable. It continues to give a “buy” rating.
Risk warning: competition intensifies risk; Integration is less than expected risk; Policy risk.
