\u3000\u30 China Baoan Group Co.Ltd(000009) 15 Shandong Wit Dyne Health Co.Ltd(000915) )
Event: the company released the first quarterly report of 2022. The operating revenue, net profit attributable to the parent company and net profit deducted from non attributable to the parent company were RMB 606 / 156 / 156 million respectively, with a year-on-year increase of + 23.74% / 43.18% / 45.80%, and the operating net cash flow was RMB 276 million, with a year-on-year increase of + 102.02%; Realize eps0 67 yuan. The performance greatly exceeded market expectations.
Comments:
4q21's control of goods and price increase combined with 1q22's strong dynamic sales made a good start in the first quarter. In the first quarter, both revenue and net profit achieved rapid growth, while the growth rate of net profit was significantly higher than that of operating revenue. The main reason is that the company stripped 51% of the equity of Huate environmental protection at the end of November 2021, and the revenue of Huate environmental protection accounted for nearly 20% in 2020. The company had a high performance base in the same period last year, while the growth rate of 1q22 net profit exceeded 40%, greatly exceeding market expectations. We believe that the excellent performance is due to: 1) the company has controlled goods through channels since November 2021 and accumulated brand potential energy. In the first quarter of this year, the goods were delivered in advance, and the production and sales were not affected by the epidemic; 2) At the beginning of the year, the price of 50 and 60 ikxin was raised slightly, and the collection of terminal mobile sales was in good condition, realizing the simultaneous increase of volume and price; 3) The new management took office in August 2021. In November, it successfully stripped off environmental protection assets and defined the main business of strategic focus. Dayin pharmaceutical launched an internal incentive scheme (involving middle and senior management and business backbone) at the end of 2021. The actual assessment period is 20212025. Take multiple measures to optimize the system and mechanism and stimulate the vitality of employees.
Yikexin tamps the basic sector, and YID is heavy and convex, with no risk of high growth throughout the year. In 2021, the sales scale of ikxin was about 1.2 billion, with an increase of more than 30%. Even though the birth rate in 2021 was low, the growth of green gourd (0-1 years old) was more than 10%, and that of pink gourd (over 1 years old) was nearly 40%. Channel expansion and category marketing contributed to the growth momentum. Looking forward to 2022, ikxin will further consolidate its market position, increase the penetration of online and county channels, and open the ceiling of vitamin AD with the new promotion strategy of 0-6 years old. We expect ikxin to achieve an increase of more than 25% in 2022. Idxin is expected to become the next billion level single product. The company officially launched the new product of vitamin D3 at the end of 2020, which has exceeded 100 million yuan in 2021. At present, there are only 4 enterprises that have been certified and listed for vitamin D3 drops. Vitamin D3 is applicable to a wide range of people, and the market space and competition pattern are better than vitamin ad. We expect the company to rely on its excellent operation experience of mineral products, and YID new will be strong, with sales exceeding 200 million yuan in 2022.
Profit forecast, valuation and rating: Shandong Wit Dyne Health Co.Ltd(000915) as a leading enterprise of children's medicine, relying on the advantages of brand and channel, the core large single products have grown steadily, the channels and new products have been expanded rapidly, and the governance structure has been continuously improved. Considering that the growth of the pharmaceutical industry exceeded expectations, the net profit from 2022 to 2024 was raised to 504 / 638 / 794 million (compared with the previous forecast + 1.8% / 6.3% / 10.9%), with a year-on-year increase of 33% / 26% / 24%. The current share price corresponds to 15 / 12 / 9 times of PE, maintaining the "buy" rating.
Risk warning: ikxin's sales do not meet expectations; Intensified market competition; Risk of failure in new drug research and development.
