\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 329 Tianjin Zhongxin Pharmaceutical Group Corporation Limited(600329) )
Key investment points
Event: the company released]2021 annual report and realized an operating revenue of 6.91 billion yuan, a year-on-year increase of 4.6%; The net profit attributable to the parent company was 770 million yuan, a year-on-year increase of 16.2%; The net profit attributable to the parent company after deduction was 740 million yuan, a year-on-year increase of 16.9%.
Quick acting Jiuxin pills grew steadily, and long-term volume is worth looking forward to. In 2021, the company’s industrial revenue was 4.28 billion yuan, with a year-on-year increase of 11%; The gross profit margin was 56.7%, a year-on-year decrease of 2.2pp. Among the company’s industrial revenue, the revenue of the core variety quick acting Jiuxin Pill was 1.3 billion yuan, a year-on-year increase of 9.5%. At present, the prevalence and mortality of cardiovascular diseases in China are still on the rise. It is estimated that the number of current patients with cardiovascular diseases is more than 300 million, and the patient base is large. Cardiovascular and cerebrovascular Chinese patent medicine has become one of the important categories of retail pharmacies. In 2020, the terminal cardiovascular and cerebrovascular Chinese patent medicine market of urban retail pharmacies in China continued to expand, with a sales revenue of more than 10 billion yuan. The price of quick acting Jiuxin pills has been raised since 2015 and completed in 2017. Before the price increase of 40mg 120 pills, the average winning price is about 25 yuan, and the daily drug amount is less than 3 yuan. After the price increase, the average winning price is more than 35 yuan, and the daily drug amount is close to 4 yuan. The daily price is still low, and there is still room for price increase in the future. At present, the company has created the concept of regular service, strengthened the promotion at the hospital end, and changed the use scenario of quick acting Jiuxin Pill for first aid. At present, the sales proportion of quick acting Jiuxin Pill at the hospital end and retail end is close to 1:1. It is expected that regular service is expected to greatly increase the consumption of quick acting Jiuxin Pill, promote the proportion of hospital end, and add power to long-term growth.
Chinese patent medicine is rich in variety resources, and the growth space of main varieties is broad. The company is rich in variety resources, with 18 dosage forms and 502 drug approval numbers, including a series of product groups including cardiovascular and cerebrovascular drugs, respiratory drugs, spleen and stomach drugs, cold drugs, tumor drugs, gynecological and pediatric drugs, as well as many well-known varieties such as Tongmai Yangxin pills, Qingyan dropping pills, Qingfei Xiaoyan pills, Weichang an and Zilong gold tablets. The sales of some varieties currently exceed 100 million yuan. It is expected that with the gradual development of the sales end of the company, It is expected to accelerate growth.
The business operation is stable and contributes stable income. In 2021, the company’s commercial business revenue reached 5.95 billion yuan, a year-on-year decrease of 0.4%; The gross profit margin was 5.3%, with a year-on-year increase of 0.5pp. Commercial business is the traditional business of the company, with a relatively large volume of revenue. It is expected to maintain steady growth in the future and contribute stable revenue to the company.
Profit forecast and rating. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 910 million yuan, 1.15 billion yuan and 1.46 billion yuan respectively, and the EPS will be 1.18 yuan, 1.49 yuan and 1.89 yuan respectively, corresponding to 23 times, 19 times and 15 times of the current stock price valuation respectively. The company will be given a “buy” rating of 30 times the target PE in 2022 and 35.4 yuan of the target price.
Risk warning: sales are less than expected; Risk of centralized purchase; Risk that the progress of products under development is less than expected.
