\u3000\u3 China Vanke Co.Ltd(000002) 390 Guizhou Xinbang Pharmaceutical Co.Ltd(002390) )
Event: the company released its 2021 annual report: it achieved an operating revenue of 6.472 billion yuan (+ 10.71%; the bracket indicates the year-on-year growth rate, the same below); The net profit attributable to the parent company was RMB 273 million (+ 57.25%); Deduct 290 million yuan (+ 45.74%) of net profit not attributable to parent company. Excluding the impact of amortization of stock option expenses, the net profit attributable to the parent company was RMB 287 million (+ 65.59%), which was basically in line with our expectations.
The medical sector promoted the improvement of quality and efficiency, and the profit margin of cancer hospital increased to 6.3%. In 2021, the company’s medical service sector achieved an operating revenue of 2.071 billion yuan (+ 5.24%), accounting for 25.41%. Including: Cancer Hospital 1.079 billion yuan (+ 2.5%); Baiyun hospital (+ 77.9 billion yuan). Throughout the year, the number of outpatients in the hospital was 1.1625 million, with 110200 people going out and hospitalized respectively, 90000 people receiving radiotherapy and 33800 operations. The company continued to promote the mode of “homogeneous development and integrated management”, added three chief experts in 2021, and the Baiyun clinical teaching center of Guizhou Medical University was officially put into use in September. The comprehensive hospital of tumor hospital carried out critical and severe treatment, Wudang hospital built a department of integrated traditional Chinese and Western medicine and consumer medicine, and made good progress in scientific research and talent construction. In 2021, the profit margin of Guizhou cancer hospital was about 6.3%, with a year-on-year increase of 2.2pct. In the future, the company will promote the coordinated expansion of hospital scale and the improvement of income structure, and continue to improve the profit margin level by strengthening fine management and improving quality and efficiency.
The pharmaceutical manufacturing sector will steadily contribute profits, and the expansion of the production of traditional Chinese medicine decoction pieces will accelerate growth. In 2021, the company’s pharmaceutical manufacturing realized an operating revenue of 704 million yuan (+ 16.05%), with a gross profit margin of 59%; The growth was mainly due to the steady recovery of the sales of Chinese patent medicine and the substantial increase in the sales of Chinese herbal pieces. Of which: Chinese patent medicine achieved an operating revenue of 398 million yuan (+ 17.66%); Tongde pharmaceutical achieved an operating revenue of 268 million yuan (+ 44.69%). Tongde pharmaceutical has 118 varieties, 164 product specifications, and 100 self built and jointly built genuine medicinal material bases. The transformation of the old production workshop and the construction of a new workshop will be completed in 2021. It is expected that the new workshop will be put into operation in 2022. At that time, the production capacity of traditional Chinese medicine decoction pieces of Tongde pharmaceutical will reach 5000 tons. In 2022, the company will increase the promotion of key varieties, and the pharmaceutical manufacturing sector is expected to contribute to steady performance growth.
The circulation sector grew steadily and rapidly, and the gross profit margin is expected to further improve. In 2021, the company’s pharmaceutical circulation sector achieved an operating revenue of 5.362 billion yuan (+ 10.44%) and a gross profit margin of 12.83% (+ 0.1pct). Among them, the drug revenue was 4.439 billion yuan (+ 10.08%); The income of instruments is RMB 1.29 billion (+ 2.29%). The number of pharmaceutical circulation customers of the company has increased, and the customer coverage rate of hospitals above grade in the whole province has reached more than 95%, and the coverage rate of grass-roots hospitals in the whole province has reached more than 45%. Relying on the group’s hospitals to improve their bargaining power to the upstream and the added value of terminal services, the pharmaceutical circulation sector is expected to continue to improve its profitability.
Profit forecast and investment rating: the net profit attributable to the parent company is expected to be 318 / 437 million yuan from 2022 to 2023, 578 million yuan in 2024, and the PE corresponding to the current market value is 34 / 25 / 19x respectively. (after adjusting the impact of equity incentive share based payment fees, it is estimated that the net profit attributable to the parent company in 20222024 will be about 372 / 461 / 578 million yuan respectively, corresponding to the current market value of 29 / 24 / 19x), maintaining the “buy” rating.
Risk tip: the improvement of hospital profitability is less than expected; The risk of policy change in the pharmaceutical industry, the risk of medical malpractice, etc.
