\u3000\u3 Shengda Resources Co.Ltd(000603) 939 Yifeng Pharmacy Chain Co.Ltd(603939) )
Event: on April 24, 2022, the company issued an announcement on the acquisition of 51% equity of Hunan Jiuzhitang Co.Ltd(000989) Pharmaceutical Co., Ltd., and the company will purchase 51% equity of Hunan Jiuzhitang Co.Ltd(000989) at a price of 204 million yuan.
Purchase 51% equity of Hunan Jiuzhitang Co.Ltd(000989) at the price of 204 million yuan, and the M & a price is reasonable: the company will purchase 51% equity of Hunan Jiuzhitang Co.Ltd(000989) at the price of 204 million yuan. Hunan Jiuzhitang Co.Ltd(000989) 2021 achieved a revenue of 1.044 billion yuan, including 520 million yuan, 282 million yuan, 120 million yuan, 70 million yuan and 30 million yuan for direct retail, wholesale business, franchise distribution, B2C and health building business respectively. Estimated according to the scale of direct retail revenue in 2021 and 51% equity of M & A, the corresponding valuation of this M & A is 0.77 times PS, and the M & a price is reasonable.
The quality of the subject matter of M & A is better, and its profitability is expected to continue to improve after M & A:
Hunan Jiuzhitang Co.Ltd(000989) has 190 self operated and 359 franchised stores respectively in Hunan Province. This M & A is conducive to increasing the market share of the company in Hunan Province. From the analysis of revenue indicators, Hunan Jiuzhitang Co.Ltd(000989) direct retail business realized a revenue of 520 million yuan in 2021, and the single store revenue of Direct stores was about 2.7368 million yuan / year. The quality of the object of M & A was better. From the analysis of profit indicators, Hunan Jiuzhitang Co.Ltd(000989) achieved net profits of 8.4218 million yuan and 2.6941 million yuan respectively in 2021 and 2022q1, with net interest rates of 0.81% and 1.02% respectively. Thanks to Yifeng Pharmacy Chain Co.Ltd(603939) excellent fine management ability and advantages of unified acquisition, the profitability of the subject matter of M & A is expected to continue to improve after the acquisition.
Investment suggestions: we expect the company to realize net profits of 929 million yuan, 1124 million yuan and 1363 million yuan respectively from 2021 to 2023, with a year-on-year increase of 20.9%, 21.0% and 21.2% respectively; Give an investment rating of buy – A.
Risk warning: the epidemic situation will affect the expansion progress of stores; The profitability of stores does not meet expectations; The price of drugs exceeded expectations, and the outflow of prescriptions was less than expected.
