\u3000\u30 China Baoan Group Co.Ltd(000009) 99 China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) )
Event: on April 22, 2022, the company released the first quarter report of 2022. In 2022q1, the company achieved a revenue of 4.194 billion yuan, a year-on-year increase of 2.81%; The net profit attributable to the parent company was 839 million yuan, with a year-on-year increase of 30.45%, and the performance growth exceeded expectations.
In 2022q1, the net profit attributable to the parent company increased by 30.45% year-on-year, and the performance growth exceeded expectations: in 2022q1, the company achieved a revenue of 4.194 billion yuan, an increase of 2.81% year-on-year; The net profit attributable to the parent company was 839 million yuan, a year-on-year increase of 30.45%; The net profit attributable to the parent company after non deduction was 797 million yuan, a year-on-year increase of 27.96%. The higher than expected growth was mainly due to the company’s continuous optimization of the sales expense structure. The sales expense rate of 2022q1 was 23.23%, a year-on-year decrease of 9.96 percentage points.
With the continuous introduction of products and strengthening of brands, the company’s performance is expected to grow steadily: in terms of CHC business, the company continues to expand and strengthen varieties, and the business is expected to grow steadily. Among them, OTC business companies continue to enrich their product lines, actively expand new channels such as e-commerce and o2o, and consolidate their brand advantages in cold, gastrointestinal, skin and other fields. In terms of prescription drugs, the product structure in the field of anti infection is basically adjusted in place, and the new products fortasol and cefpirome sodium for injection are expected to drive the restorative growth of the business. In terms of traditional Chinese medicine formula granule business, the company continues to expand the standardized base of traditional Chinese medicine and expand the medical terminal market through channel construction and grass-roots academic service system construction. According to the company’s announcement, the company is expected to achieve double-digit connotative growth in revenue in 2022, and the net profit is expected to match the growth level of revenue.
Equity incentive was implemented in time to lay a solid foundation for the sustainable and steady development of the company: Recently, the company issued an equity incentive plan to grant 9.789 million restricted shares to 273 people including directors, senior managers, middle managers, core technicians and core business personnel at the price of 14.84 yuan / share. The timely implementation of equity incentive is conducive to binding the core backbone of the company and laying a solid foundation for the medium and long-term development of the company.
Investment suggestion: we expect the company to realize net profits of RMB 2.362 billion, RMB 2.699 billion and RMB 3.062 billion respectively from 2022 to 2024, with a year-on-year increase of 15.4%, 14.3% and 13.5% respectively; Give an investment rating of buy-a.
Risk warning: OTC sales do not meet expectations; The growth of prescription drugs was less than expected; The price of prescription drugs exceeded expectations.
