\u3000\u30 China Baoan Group Co.Ltd(000009) 99 China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) )
Performance review
On April 22, the company released the first quarterly report of 2022, which realized a revenue of 4.194 billion yuan (+ 2.8%), a net profit attributable to the parent company of 839 million yuan (+ 30.5%), and a net profit not attributable to the parent company of 797 million yuan (+ 28%).
Business analysis
Profit growth exceeded expectations, and the transformation driven the double rise of “quality + quantity”. The company has formed a business system with self diagnosis and treatment (i.e. CHC) and prescription drugs as the core. The CHC business of the company has increased for three consecutive years, and the business proportion has increased year by year; On the other hand, specialty line + formula particles drive the development of prescription drug business. With the common growth of new and old products of specialty line and the gradual liberalization of formula particle industry, the prescription drug business sector is expected to further develop in the future.
The sales expense ratio has been reduced and the profitability has been continuously improved. The gross profit margin in the first quarter was 55%, a year-on-year decrease of 4.4 percentage points; The net interest rate was 20.2%, an increase of 4.3 percentage points year-on-year. Among them, the rate of administrative expenses was 4.5%, which was basically the same year-on-year; The R & D expense ratio was 4.48%, a slight increase of 0.6 percentage points year-on-year; The company’s sales expenses decreased by 23% year-on-year, driving the company’s profitability by 10%. With the further demonstration of the company’s brand strength and the gradual emergence of large-scale advantages, it is expected that the company’s sales expenses will maintain a position, so as to optimize the company’s overall profitability.
Give play to 999 brand value and promote the sales volume of CHC product group. In the future, relying on 999 brand power, the company will expand its advantages in all fields: on the one hand, the company will continue to refine product categories and create a clear product positioning to meet the health management needs of patients in the whole process of disease diagnosis and treatment; On the other hand, continuously introduce products, enrich product lines, and promote the sales volume of the whole category of the company through product structure adjustment and professional team, so as to drive the sustainable development of the company.
Profit adjustment and investment suggestions
China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) will continue to benefit from the development of traditional Chinese medicine. It is estimated that the operating revenue from 2022 to 2024 will be 17.6 billion yuan, 20.1 billion yuan and 22.7 billion yuan respectively; It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 2.38 billion yuan, 2.77 billion yuan and 3.21 billion yuan respectively, with growth rates of 16.5%, 16% and 15.8% respectively, maintaining the “buy” rating.
Risk tips
Product centralized purchase risk; Risk of increased competition; Product promotion is not as expected; Risk of price limit of Medicare drugs; Risk of brand value change; Price fluctuation risk of raw materials; Goodwill impairment risk.
