\u3000\u3 Shengda Resources Co.Ltd(000603) 233 Dashenlin Pharmaceutical Group Co.Ltd(603233) )
Performance review:
On April 27, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue was 16.76 billion yuan (+ 15%), the net profit attributable to the parent was 790 million yuan (- 26%), and the net profit not attributable to the parent was 720 million yuan (- 30%); In Q4 of 2021, the revenue in a single quarter was 4.4 billion yuan (+ 7.7%), the net profit attributable to the parent company was - 27 million yuan (- 114%), and the net profit not attributable to the parent company was - 42 million yuan (- 124%);? In 2022, Q1 company realized revenue of 4.67 billion yuan (+ 15%), net profit attributable to parent company of 384 million yuan (+ 13%), net profit not attributable to parent company of 396 million yuan (+ 17%).
Business analysis
The performance is under pressure in the short term, and the profitability is gradually restored. In 2021, the company's overall gross profit margin was 38%, a slight decrease of 0.32pct year-on-year, and the net profit margin was 4.8%. In 2022, Q1 gross profit margin was 41.5%, with a year-on-year increase of 2.2pct and a month on month increase of 3.7pct; The net interest rate was 8.2%, a slight decrease of 0.37% year-on-year, an increase of 8.8pct month on month, and the overall operation was developing well. As the company continues to optimize the internal fine management level, the overall performance is expected to gradually recover and further improve.
The expansion trend outside the province is better, and the national layout is further balanced. The company actively expanded outside the province. In 2021, it entered five provinces including Hubei, Hainan, Sichuan, Shandong and Chongqing. By 2022, Q1 had covered 15 provinces and cities in China. Among them, the proportion of Direct stores outside South China increased from 22.2% at the end of 2020 to 30.3%. In addition, Q1 revenue in East China increased by 21% and 54% year-on-year in 2021 and 2022; The revenue of northeast, north, northwest and southwest regions increased by 97% and 184% year-on-year. With the continuous expansion outside the province, the company's regional development is further balanced and is expected to maintain a high performance growth rate.
Develop new retail formats and create long-term competitive advantages. The company accelerated the layout of Internet business. By the end of 2021, the company's o2o drug delivery service had covered 7240 stores across the country, with an online rate of 89%; At the same time, B2C business was carried out, and the delivery mode of central warehouse + regional warehouse + front warehouse was used to cover the whole country. In 2021, the sales of the company's new retail business (o2o + B2C) increased by 87% year-on-year. Internet business is expected to empower the company's new retail and accelerate the company's online development, so as to improve the company's market share and accelerate the process of improving the industry concentration.
Profit forecast and investment suggestions
Due to the uncertainty of the epidemic development, we lowered the company's net profit attributable to the parent company by 30% / 28% in 22-23 years. It is estimated that the net profit attributable to the parent company in 22-24 years will be 1.12 billion, 1.48 billion and 2.07 billion respectively, with growth rates of 42%, 32% and 40% respectively, maintaining the "buy" rating.
Risk tips
The uncertainty of M & a extension; The outflow of prescriptions did not meet expectations; Internet shock risk; Income is concentrated in different regions.
