\u3000\u30 China Baoan Group Co.Ltd(000009) 63 Huadong Medicine Co.Ltd(000963) )
Event: the company released the annual report of 2021 and the first quarter report of 2022, with significant growth in month on month performance.
1) in 2021, the company achieved an annual operating revenue of 34.563 billion yuan, a year-on-year increase of 2.61%; The net profit attributable to the parent company was 2.302 billion yuan, a year-on-year decrease of 18.38%, and the non net profit attributable to the parent company was 2.189 billion yuan, a year-on-year decrease of 9.91%. In the fourth quarter, the operating revenue was RMB 8.636 billion, with a year-on-year increase of 5.54%, and the non net profit attributable to the parent deduction was RMB 427 million, with a year-on-year increase of 7.04% (the year-on-year index of the quarter has turned to positive growth);
2) the company released the first quarterly report of 2022, and its profitability has achieved year-on-year growth, with an operating revenue of 8.933 billion yuan, a year-on-year increase of 0.4%; The net profit after deducting non-profit was 699 million yuan, a year-on-year increase of 0.39%;
Comments: the performance of the industrial sector improved month on month, and the medical and American business grew strongly. By sector:
1. Pharmaceutical industry sector: the performance of single quarter was significantly improved month on month. In 2021, affected by factors such as the national centralized purchase of some products and the negotiated price reduction of medical insurance, the operating revenue was 10.109 billion yuan, a year-on-year decrease of 8.43%, and the net profit was 2.092 billion yuan, a year-on-year decrease of 10.32%. In 2022, Q1 achieved an operating revenue of 2.791 billion yuan, a year-on-year decrease of 9.73% and a month on month increase of 19.45% over the fourth quarter of 2021; After deducting non recurring profits and losses, the net profit was 580 million yuan, a year-on-year decrease of 13.41% and a significant increase of 48.08% month on month.
2. Medical beauty sector: Sales of girl needles are strong, and overseas medical beauty is growing rapidly:
1) Sinclair achieved an annual operating revenue of about 665 million yuan, a year-on-year increase of 108.51%, of which Sinclair's own revenue increased by 79.24%. The global market of the core product ellans é r achieved 99% growth.
2) in February 2022, Sinclair completed the acquisition of 100% equity of viora. In 2022, Q1 medical and American sector achieved a total operating revenue of 453 million yuan, with a year-on-year increase of 226.8%. Sinclair achieved a revenue of 31.04 million pounds (about 260 million yuan), with a year-on-year increase of 163.1%, the highest level in a single quarter in history, and made a significant turnaround from loss to profit year-on-year.
3) with the commercialization of ellans é R iyans in the mainland in 2021, Xinkeli aesthetics, a wholly-owned subsidiary of China medical beauty, grew rapidly, with a revenue of 185 million yuan in 2021 and 157 million yuan in Q1 in 2022.
3. Pharmaceutical business: continue to maintain a stable growth trend. In 2021, the pharmaceutical business of the company actively innovated its business and service model, and achieved an annual sales revenue of 23.115 billion yuan, a year-on-year increase of 5.94%.
The gross profit margin and expense rate remained stable. The gross profit margin in 2021 was 30.7%, slightly lower than that in 2020 (33.05%). The sales expense was 5.424 billion yuan, a year-on-year decrease of 9.15% and the sales expense rate was 15.69%; The management fee was 1.167 billion yuan, a year-on-year increase of 16.84%, and the management fee rate was 3.38%; The R & D cost was 980 million yuan, a year-on-year increase of 5.71%, and the R & D cost rate was 2.83%, slightly higher than that in 2020 (2.75%).
Profit forecast and Valuation: raise the sales expectation of the medical and American sector and lower the sales expectation of intensively purchased varieties. We predict that the operating revenue of the company from 2022 to 2024 will be 39.1 billion yuan (39.547 billion yuan before adjustment), 43.52 billion yuan (44.376 billion yuan before adjustment) and 48.85 billion yuan respectively, with a year-on-year increase of 13%, 11.3% and 12.2% respectively; Considering the synchronous acceleration of the layout of the company's innovative drugs and medical beauty business, strong market foundation and strong promotion ability, the "buy" rating is maintained.
Risk warning: risk of drug research and development; The risk that the market capacity is less than expected; Risk of substantial price reduction of generic drugs, etc
