\u3000\u30 China Baoan Group Co.Ltd(000009) 15 Shandong Wit Dyne Health Co.Ltd(000915) )
Key investment points
Event: the company released the first quarterly report of 2022, realizing an operating revenue of 610 million yuan, a year-on-year increase of 23.7%; The net profit attributable to the parent company was 160 million yuan, a year-on-year increase of 43.2%; The net profit attributable to the parent company after deduction was 160 million yuan, a year-on-year increase of 45.8%.
The main pharmaceutical industry grew rapidly and its profitability continued to improve. In 2022q1, the company's revenue continued to grow rapidly, and the profit growth was much faster than the revenue growth, which was related to the increase of the company's gross profit margin and the decrease of the expense rate. From the revenue side, in 2021, the company stripped off its environmental protection business and focused on the main pharmaceutical industry. It is expected that the revenue growth rate of the pharmaceutical business of the company in 2022q1 will be 40% - 50%, and continue to maintain rapid growth. From the perspective of profitability, the gross profit margin in 2022q1 is 70.6%, with a year-on-year increase of 9.2pp. The sharp increase in the gross profit margin is related to the increase in the proportion of the company's pharmaceutical business revenue. The decrease in the expense rate in 2022q1 is mainly related to the relatively less investment and confirmation of expenses in the first quarter, which is expected to increase gradually from the second quarter.
Vitamin AD supplements are the absolute leader, with 5 billion market space gradually released. The deficiency of vitamin A and vitamin D in Chinese children is still a public health problem. The way of vitamin AD supplement is suitable for the current situation of Chinese children. According to the survey, the vitamin A / D deficiency rate of Chinese children is more than 40%. According to the calculation, the estimated permeability of vitamin AD supplement in Chinese children aged 0-3 years in 2021 is about 21.4%, which still has great room for growth. At present, the market competition pattern of vitamin AD supplements is good, in which ikoxin occupies more than 50% of the market share, is the absolute leader, the brand is deeply rooted in the hearts of the people, the peak sales is expected to exceed 5 billion yuan, and there is a large growth space.
Second tier varieties continue to be abundant, with sufficient driving force for performance growth. At present, the company's second-line varieties are gradually increasing, including vitamin D drops (yidexin), compound calcium carbonate effervescent granules (gaidixin), licorice zinc granules (yiganxin), iron dextran granules (yijiaxin), oral rehydration salt powder, azithromycin granules, rifaximin dry suspension, etc. it is expected that with the continuous enrichment of the company's second-line varieties, the company's performance is expected to maintain steady growth for a long time.
Profit forecast and investment suggestions. It is estimated that the company's EPS from 2022 to 2024 will be 2.17 yuan, 2.77 yuan and 3.48 yuan respectively. The company is the leader of vitamin AD drops. Its core products have large growth space and strong competitiveness. The second-line varieties are gradually enriched and the driving force for performance growth is sufficient. It is optimistic about the long-term development of the company. The company is given a "buy" rating of 20 times PE in 2022, with a corresponding target price of 43.4 yuan.
Risk warning: sales are less than expected; Risk of centralized purchase; Risk that the progress of products under development is less than expected.
