\u3000\u3 Shengda Resources Co.Ltd(000603) 939 Yifeng Pharmacy Chain Co.Ltd(603939) )
Performance review
On April 28, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue was 15.33 billion yuan (+ 17%), the net profit attributable to the parent was 888 million yuan (+ 19%), and the net profit not attributable to the parent was 859 million yuan (+ 20%);
In Q4 of 2021, the revenue was 4.388 billion yuan (+ 18%), the net profit attributable to the parent company was 192 million yuan (+ 12%), and the net profit not attributable to the parent company was 177 million yuan (+ 5%);
In 2022, Q1 company realized revenue of 4.148 billion yuan (+ 14%), net profit attributable to parent company of 272 million yuan (+ 13%), net profit not attributable to parent company of 266 million yuan (+ 14%).
Business analysis
The operation is stable and good, and the performance growth is in line with expectations. The company adheres to the business policy of key penetration and in-depth marketing. In 2021, the gross profit margin of the company was 40.35%, with a year-on-year increase of 2.37pct; The net interest rate was 6.46%, a slight decrease of 0.13pct year-on-year; Among them, the sales expense rate was 26.5%, with a year-on-year increase of 1.92pct, and the management expense rate was 4.29%, with a year-on-year increase of 0.13pct. In 2022, the gross profit margin of Q1 company was 40.95%, with a slight increase of 0.41pct year-on-year and 2.59pct month on month; The net interest rate was 7.28%, a slight decrease of 0.15pct year-on-year and an increase of 2.22pct month on month. The company continues to promote cost reduction and efficiency increase, resulting in continuous growth of profitability.
Regional focus, occupy the market, steadily expand and increase the driving force of sustainable growth. The company adheres to the regional focus and steady expansion strategy to quickly occupy the regional market. By Q1 2022, the company had 8225 stores (including 996 franchise stores) in Hunan, Hubei, Shanghai, Jiangsu, Jiangxi, Zhejiang, Guangdong, Hebei and Beijing, with a net increase of 1818 stores in 2021. The endogenous growth of old stores and the epitaxial growth of M & A stores are superimposed with the improvement of the company’s management efficiency, which brings sustained impetus to the company’s performance growth.
Strengthen the layout of traditional Chinese medicine products and improve profitability. In 2021, the company’s traditional Chinese medicine revenue was 1.42 billion yuan (+ 19%), with a gross profit margin of 46.7%; In 2022, the revenue of Q1 traditional Chinese medicine was 386 million yuan (+ 9%). Since 2019, the company has invested in the establishment of hengxiu hall to carry out the business of decoction pieces of traditional Chinese medicine, control the quality of traditional Chinese medicine from the source and reduce the procurement cost; In 2022, the company acquired Hunan Jiuzhitang Co.Ltd(000989) , and reached an agreement on Jiuzhitang Co.Ltd(000989) to promote the sales of large health products such as traditional Chinese medicine and homologous drugs and foods.
Profit forecast and investment suggestions
As a leading drugstore, the company continued to improve its concentration through extensive M & A. We gave the company a net profit attributable to the parent company of RMB 1.22/15.5/1.91 billion from 2022 to 2024, with a year-on-year increase of 37%, 27% and 23%. Maintain the “buy” rating.
Risk tips
The uncertainty of epidemic development, the uncertainty of extension M & A, the unexpected outflow of prescriptions, the impact of volume purchase on the variety price of pharmacies, and the impact of online pharmacies on offline pharmacies; Goodwill impairment risk.
