\u3000\u3 Shengda Resources Co.Ltd(000603) 896 Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) )
The profit increased rapidly, the scale effect promoted the improvement of profitability, and maintained the “buy” rating
On April 6, 2022, the company released the performance express for the first quarter of 2022: the company achieved an operating revenue of 204 million yuan in the first quarter, a year-on-year increase of 16.99%; The net profit attributable to the shareholders of the listed company was 57.791 million yuan, a year-on-year increase of 40.16%. The company’s profit growth exceeded our expectations. The company’s products have clinical value and there is great room for growth in expanding markets outside the province in the future. We maintain the profit forecast for 20222024 unchanged. It is estimated that the net profit attributable to the parent company in 20222024 will be 264 million yuan, 345 million yuan and 448 million yuan, corresponding to EPS of 173, 2.26 and 2.94 yuan / share respectively. The current share price corresponds to PE of 33.8, 25.9 and 19.9 times respectively, maintaining the “buy” rating.
Internet retail complements traditional channels, and the reform of distribution channels has achieved initial results
In terms of sales areas, the company achieved a revenue of 482 million yuan (+ 19.1%) and a gross profit margin of 84.55% (- 0.7pct) in Zhejiang Province in 2021; Outside Zhejiang Province, the revenue was 92 million yuan (+ 16.31%), and the gross profit margin was 84.92% (+ 1.23 PCT); Internet business achieved a revenue of 185 million yuan (+ 27.33%) and a gross profit margin of 85.05% (+ 0.76pct). Internet sales has gradually become an important supplement to traditional sales channels. In terms of sales mode, in terms of direct sales mode, the company achieved a revenue of 344 million yuan (+ 13.67%) in 2021. In terms of distribution mode, in 2021, the company achieved revenue of 416 million yuan (+ 27.13%), of which buyout distribution achieved revenue of 270 million yuan (+ 36.54%), and the sales of dealers outside the province belong to buyout distribution. The smooth promotion of dealer mode outside the province has driven the rapid growth of revenue.
The products have the core advantages of seed source, cultivation and processing
The company’s products have the core advantages of seed source, cultivation and processing, which lays a good foundation for the national promotion of products. In terms of provenance, the company independently selected nine high-quality provenances with independent intellectual property rights, with high content of breeding active ingredients, which cast a moat for the company. In terms of cultivation, the company ensures the high quality of medicinal materials by imitating wild organic cultivation, and uses Internet of things technology to trace the whole process of planting. In terms of processing, the supersonic airflow wall breaking technology independently developed by the company significantly improves the product safety, and the original wall removal purification technology improves the content of active ingredients by more than 8 times, with a long patent protection period.
Risk tip: the promotion outside the province is less than expected, and the policy implementation of traditional Chinese medicine is less than expected.
