\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 129 Chongqing Taiji Industry (Group) Co.Ltd(600129) )
Key investment points
Event: the company achieved a revenue of 3.5 billion yuan in 2022q1, with a year-on-year increase of 6.3%, and the net profit attributable to the parent company was 20 million yuan, with a year-on-year decrease of 20%. The net profit not attributable to the parent company was 70 million yuan, with a year-on-year increase of 104.6%.
The company doubled its non net profit deducted in Q1, and the gross profit margin of the industrial sector increased by 5.9% year-on-year. In 2022q1, the company achieved a revenue of 3.5 billion, an increase of 6.3% year-on-year, including 2.15 billion in the pharmaceutical industry, an increase of 12.6% year-on-year, and 1.97 billion in the commercial sector, a decrease of 2.6% year-on-year. Under the influence of the epidemic, the commercial sector is under pressure. From the perspective of gross profit margin, the industrial gross profit margin increased significantly. The gross profit margin of 2022q1 increased to 65%, with a year-on-year increase of 5.9pct. The cost reduction and efficiency increase strategy has initially achieved results. 2022q1 company’s non recurring profit and loss resulted in a loss of 50 million, which was mainly due to the change in fair value caused by the decline in the market value of shares held. The profit after non operating deduction doubled year-on-year. After the entry of Sinopharm, the operation improved significantly and entered the performance cycle.
The industrial sector started, and the core varieties increased significantly. The company’s core industrial varieties increased significantly: 1) the revenue of anti infection products was 530 million, with a year-on-year increase of 39%, and the gross profit margin increased by 8.5 PCT, mainly due to the increase in the sales of cefazoxime sodium for injection; 2) The revenue of respiratory products was 460 million, with a year-on-year increase of 46%, and the gross profit margin increased by 4.5 PCT year-on-year, mainly due to the increase of sales of emergency syrup; 3) The income of digestive system products was 400 million, with a year-on-year increase of 70%, and the gross profit margin increased by 4.4 PCT, mainly due to the increase in the sales of Huoxiang Zhengqi oral liquid; 4) The main drag on industrial growth was other general medicine products, with Q1 revenue of about 90 million yuan, a year-on-year decrease of 74%.
The “14th five year plan” strategic plan depicts a grand blueprint, with substantive performance commitments rather than slogans. On January 1, 2022, the company released the outline of the “14th five year plan” strategic plan, striving to achieve an operating revenue of 50 billion yuan by the end of the “14th five year plan” through endogenous development and extension expansion, and the net profit margin is not lower than the average level of the pharmaceutical industry; The company’s expectations for 2022 are as follows: 1) annual revenue expectation: the revenue in 2022 will increase by 15%, including more than 18% in the industrial sector and more than 12% in the commercial sector; 2) Sub product expectations of the industrial sector: strategic products such as Huoxiang Zhengqi oral liquid and Jizhi syrup increased by 50%, and clinical therapeutic products such as yibaoshiling, meifeikang, Tongtian oral liquid, sinusitis oral liquid, lofenadine sustained-release tablets and Xiaojin tablets increased by 30%; 3) The expectation of the commercial sector: no less than 2000 newly introduced product specifications, more than 100 newly developed stores (including franchising), no less than 100 newly developed medical institutions, no less than 1000 newly developed grass-roots medical institutions, 1000 new customers of retail terminals, an increase of more than 10% in direct retail revenue, a year-on-year increase of more than 14% in the revenue of distribution business of the two terminals, and a year-on-year increase of more than 12% in the revenue of commercial distribution business.
Investment suggestion: the company’s core varieties have outstanding advantages and great growth potential. After Sinopharm takes the lead, the company’s corporate governance and product sales capacity will be further improved. We expect the company’s performance of RMB 350 / 5.5 / 840 million in 22-24 years, with a valuation of 24 / 16 / 10 times, and maintain the “buy” rating.
Risk tip: product sales are less than expected, governance optimization is less than expected, and traditional Chinese medicine industry and related policy risks
