\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 285 Henan Lingrui Pharmaceutical Co.Ltd(600285) )
Event: April 25, 2022 Henan Lingrui Pharmaceutical Co.Ltd(600285) released the annual report of 2021 and the first quarterly report of 2022:
1) 2021 annual report: the operating revenue was 2.694 billion yuan, a year-on-year increase of 15.52%; The net profit attributable to the parent company was 362 million yuan, a year-on-year increase of 11.08%; Net profit deducted from non parent company was 355 million yuan, with a year-on-year increase of 18.46%.
2) the first quarterly report of 2022: the revenue was 682 million yuan, with a year-on-year increase of 15.73%; The net profit attributable to the parent company was 131 million yuan, a year-on-year increase of 35.41%; The net profit attributable to the parent company was 15.05 billion yuan, a year-on-year increase of 99.9%.
From 2021 to 2022q1, the company achieved double-digit and stable growth in revenue for several consecutive quarters. In 2021, the annual operating revenue was 2.694 billion yuan, with a year-on-year increase of 15.52%. Quarterly, 2021q1-q4 achieved revenue of RMB 589 / 7.66 / 6.98 / 640 million respectively, with a year-on-year increase of 20% / 12% / 21% / 10%. In 2022q1, the company continued to maintain stable growth and achieved revenue of 682 million yuan, a year-on-year increase of 16%, maintaining double-digit and stable growth of revenue for several consecutive quarters.
The impairment of assets in 2021q4 slowed down the growth of apparent net profit attributable to parent company and improved the profitability in 2022q1. In 2021, the net profit attributable to the parent company was 362 million yuan, with a year-on-year increase of 11.08%. Quarter by quarter, 2021q1-q4 achieved a net profit attributable to the parent company of RMB 0.97/1.23/1.07/0.35 billion respectively, with a year-on-year increase of 26% / 22% / 16% / – 38%, and a net profit margin of 16% / 16% / 15% / 5%. In 2021q4, the net profit attributable to the parent company decreased significantly, mainly due to changes in equity incentive expenses and gains and losses on the disposal of non current assets. The net profit attributable to the parent company in 2022q1 was 131 million yuan, with a year-on-year increase of 35.41% and a net profit margin of 19%, an increase of 3PP compared with 2021q1. The high increase of net profit attributable to parent company in 2022q1 was mainly due to the increase of sales revenue, the decrease of sales expense ratio and the receipt of government subsidy of 26.34 million yuan.
The price increase of two tiger patches achieved new growth in performance, and the sales volume of oral drugs increased significantly. The three patch products in the two tigers series have been optimized and upgraded, and the ex factory prices of Zhuanggu musk analgesic ointment, joint analgesic ointment and Shangshi analgesic ointment have been increased. It is expected that the products are expected to achieve both revenue and net profit return to the parent in 2022. In 2021, the revenue of oral drug tablets and capsules increased by 37% and 16%, with a rapid growth. In the future, the company will gradually strengthen the marketing of oral drugs, and its revenue volume and profit are expected to grow rapidly.
Investment suggestion: the company is a leading enterprise of traditional Chinese medicine in China, with many advantageous paste varieties and high consumer recognition. With the marketing reform of the company, the product sales volume is gradually increasing, and the future performance is expected to grow. It is expected to achieve a revenue of RMB 3.146/36.08/3.973 billion from 2022 to 2024, and the net profit attributable to the parent company is RMB 454/5.57/634 million respectively, equivalent to EPS of RMB 0.80/0.98/1.12 respectively, corresponding to PE of 13X / 10x / 9x, maintaining the “recommended” rating.
Risk warning: product sales are not as expected, policy risks and regulatory risks
