\u3000\u30 China Baoan Group Co.Ltd(000009) 63 Huadong Medicine Co.Ltd(000963) )
Key investment points
Performance overview: net profit attributable to parent company in 21 years / 22q1 - 18.4% / - 7.1% year on year
In 2021, the company achieved revenue of 34.56 billion yuan (+ 2.6% YoY), net profit attributable to parent company of 2.3 billion yuan (- 18.4% YoY), net profit not attributable to parent company of 2.19 billion yuan (- 9.9% YoY). If adjusted according to the same caliber as the statement of the holding subsidiary East China Ningbo in the previous year, the operating revenue is + 3.1% year-on-year, and the net profit not attributable to the parent company is deducted by - 7.6% year-on-year.
2022q1: the apparent net profit decreased, and the deduction of the same caliber increased slightly year-on-year. The company realized a revenue of 8.93 billion yuan (+ 0.4% YoY), a net profit attributable to the parent company of 700 million yuan (- 7.1% YoY), and deducted a net profit not attributable to the parent company of 700 million yuan (+ 0.4% YoY). If adjusted according to the same caliber as the statement of the holding subsidiary East China Ningbo in the previous year, the operating revenue is + 3.8% year-on-year, and the net profit not attributable to the parent company is deducted + 1.7% year-on-year.
Pharmaceutical business: the price reduction of star products such as bailing capsule caused short-term fluctuations and month on month repair trend
Revenue splitting in 2021: affected by the price reduction of medical insurance negotiation catalogue and centralized purchase, the pharmaceutical industry is under pressure in the short term. 1) Pharmaceutical industry: the revenue is 10.5 billion yuan (- 7.7%), accounting for 30%, of which the revenue of Central America and East China, the core subsidiary, is 10.11 billion yuan (- 8.4%), and the net profit is 2.09 billion yuan (- 10.3%); The revenue of industrial microbiology was 420 million yuan (+ 69%). 2) Pharmaceutical business: revenue of 24.2 billion yuan (+ 5.2%), accounting for 70%.
22q1 revenue split: the pharmaceutical industry has been repaired month on month, and it is expected to continue to improve throughout the year. Affected by the price reduction of bailing and other products, the core subsidiary of Central America and East China had a revenue / deduction of non net profit of RMB 2.79/580 billion, a year-on-year increase of - 10% / - 13%, a month on month increase of + 20% / + 48%, and the month on month data stabilized and rebounded; The revenue of industrial microbiology business was + 99% year-on-year, and the demand for external orders increased.
Medical beauty business: Chinese girl needle achieves good results + turning losses into profits overseas, contributing an important increment
2021: the revenue of medical beauty business (excluding Ningbo in East China) was 1 billion yuan (+ 123%), of which the revenue of international medical beauty / China Medical Beauty was 670 / 370 million yuan, a year-on-year increase of + 109% / + 183%.
1) China Xinkeli aesthetics (mainly engaged in girls' needles): the revenue of 21 / 22q1 is 185 / 157 million yuan respectively. 400 institutions have been signed and more than 700 doctors have been trained. The income and profit contribution of maiden needle has exceeded that of medical beauty agency in Ningbo, East China in the same period, and the impact of liquidation in Ningbo, East China has been gradually digested.
2) Sinclair overseas: the revenue in 21 years was 670 million yuan, a year-on-year increase of 109%; 22q1's revenue was about 260 million yuan, 163% year-on-year, the highest in a single quarter in history. It made a substantial turnaround and achieved its first operating profit. At present, the epidemic prevention restrictions in overseas markets are relatively loose, and Sinclair's annual sales are expected to continue to reach a new high.
Profitability: centralized purchase and price reduction affect digestion, and various expense rates are well controlled
2022q1: gross profit margin 33.8% (- 1.0pp); Net interest rate 8.0% (- 0.7pp); The rates of sales / management / R & D expenses were 16.0% (- 2.5pp) / 3.4% (+ 0.3pp) / 3.6% (+ 1.1pp) respectively. 2021: gross profit margin 30.7% (YoY - 2.4pp); Net interest rate 6.8% (YoY -1.9pp); The rates of sales / management / R & D expenses were 15.7% (- 2.0pp) / 3.4% (+ 0.4pp) / 2.8% (+ 0.1pp) respectively.
Long term optimistic: the three sectors go hand in hand, and the product pipelines are increasingly abundant
1) pharmaceutical industry: introduce a variety of innovative biological drugs and lay out the field of industrial microbiology. Under the centralized purchase, generic drugs have entered the era of low profit. The company has actively cooperated with famous pharmaceutical enterprises such as American proventionbio, akso, kiniksa and Japanese scohia, obtained relevant rights and interests of a variety of innovative products, and realized the license out of products under research for the first time; It has also formulated a strategic plan for the industrial microbiology sector. In November, it jointly established Hubei Meiqi, which is expected to enter the industrialization stage in 23 years. In December, it acquired Huachang high tech, focusing on the industrialization of nucleoside series products, semi synthetic antiparasitic drugs from microorganisms and other drugs. In addition, Jiangdong phase II production base invested by the company with an investment of 2.2 billion yuan has also been officially put into operation, and has obtained the production certification license of Bailing Capsules, bailing tablets and other products.
2) pharmaceutical business: expand the market network of the whole province and increase the supply chain distribution system. Following the development strategy of "stabilizing the hospital, arranging outside the hospital and expanding e-commerce", the company officially opened the Jinhua central warehouse of pharmaceutical logistics with more than 40 new supplier cooperation projects, more than 200 new contract products and an annual throughput of more than 10 million pieces. Its distribution scope can cover township (street) level health centers and pharmacies to open up the "last kilometer" of pharmaceutical distribution.
3) medical beauty business: the performance of girls' needles has increased, and the subsequent reserve products are abundant. At present, the company has 21 products on the market at home and abroad, and 14 are under research, covering the mainstream fields of light medicine and beauty, such as facial filling, catgut embedding, skin management, body shaping, hair removal, private repair and so on. Maiyan's products have increased by 99% worldwide, including Liyan's products ® Series new high-end hyaluronic acid and lanluma ® L-polylactic acid collagen stimulants have also performed well in overseas markets; Sinclair, a subsidiary of the UK, acquired hightech and viora, and settled in the field of energy source equipment, including reaction ™ The product has obtained the class III mechanical certificate of the food and Drug Administration in 2015; In addition, Sinclair has obtained the exclusive license of four global regions (except the United States) of Belgian kiomed company in the research of chitosan medical and American products. Its application fields can be benchmarked with hyaluronic acid, collagen, etc., with broad prospects; The company's newly introduced cold touch beauty instrument Kuxue (F0) has also been approved to be listed in South Korea and Taiwan.
Profit forecast and Valuation:
The company has actively distributed three major sectors: pharmaceutical industry, pharmaceutical commerce and medical beauty business, and has developed into a large comprehensive pharmaceutical company integrating pharmaceutical R & D, production and distribution. With the launch of maiden needle, F0 and other medical beauty products, the company's new medical beauty business is expected to bring a new growth curve. It is estimated that the company's net profit attributable to the parent company in 202224 will be RMB 2.84/37.3/4.54 billion respectively, an increase of 23.6% / 31.3% / 21.5% at the same time. The current market value corresponds to PE of 20 / 15 / 12x, maintaining the "buy" rating.
Risk tips: the risk of intensified market competition, the risk that the product registration approval document cannot be approved, the risk of new drug research and development, the risk of strategic mistakes of the company, the low proportion of medical and American business, with certain uncertainty, etc.
