\u3000\u3 Shengda Resources Co.Ltd(000603) 939 Yifeng Pharmacy Chain Co.Ltd(603939) )
Event: on the evening of April 28, 2022, the company released its annual report for 2021. During the reporting period, the company realized a revenue of 15.326 billion yuan (+ 16.6%) and a net profit attributable to the parent company of 888 million yuan (+ 19.42%). Among them, Q4 realized a revenue of 4.388 billion yuan (+ 18.35%), and a net profit attributable to the parent company of 192 million yuan (12.46%).
Meanwhile, the company released the first quarterly report of 2022. During the reporting period, the company achieved revenue of 4.148 billion yuan (+ 14.29%) and net profit attributable to the parent company of 272 million yuan (+ 12.82%).
The performance grew steadily, the gross profit margin continued to improve, and the changes in accounting standards affected the net profit margin. The company's performance is brilliant. Under the repeated epidemic in 2021 and 2022q1, the profit side still achieved double-digit growth. Specifically, in 2021, the company achieved a gross profit margin of 40.35% (+ 2.37pct), a change in sales / management / financial expense rate of + 1.92pct / + 0.17pct / + 0.49pct respectively, and a net profit margin of 6.46% (+ 0.07pct). In 2022q1, the company realized a gross profit margin of 40.95% (+ 0.41pct), and the sales / management / financial expense rate changed by + 0.23pct / + 0.25pct / - 0.28pct respectively, realizing a net profit margin of 6.56% (- 0.09pct).
By product, Chinese and Western patent medicines and traditional Chinese medicine grew steadily, and the gross profit margin of non drug business increased significantly. In 2021, the company realized revenue of 10.626 billion yuan (+ 18.17%), gross profit margin of 34.93% (+ 1.17%), revenue of 1.425 billion yuan (+ 18.88%), gross profit margin of 46.65% (+ 0.21%), revenue of 2.756 billion yuan (+ 5.11%) and gross profit margin of 47.86% (+ 6.17%) from Chinese and Western patent medicines. In 2022q1, the company realized revenue of 2.952 billion yuan (+ 14.93%), gross profit margin of 35.23% (+ 0.3%), revenue of 386 million yuan (+ 9.05%), gross profit margin of 47.97% (+ 1.2%), revenue of 673 million yuan (+ 16.36%) and gross profit margin of 51.24% (+ 1.13%) for non drugs.
Stores expanded rapidly and the "regional focus" strategy continued to advance. By the first quarter of 2022, the company had 8225 stores (including 996 franchise stores), and 416 stores were added in Q1 of 2022, including 232 self built stores, 158 purchased stores, 64 franchise stores and 38 closed stores. In 2021, 1818 stores were added, including 1197 self built stores, 425 purchased stores, 297 franchised stores and 101 closed stores. In 2021q4, 593 stores were added, including 388 self built stores, 183 purchased stores, 17 franchised stores and 25 closed stores. The company's strategy of "focusing on the region" and "improving the profit level of the industry", so that the company can continuously surpass the existing average profit level of the industry.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.043/13.09/1.611 billion respectively, and the corresponding PE will be 23 / 18 / 15 times respectively. The company focused on regional strategy, refined management and improved regional concentration, resulting in stable performance growth.
Risk warning: competition intensifies risk; Integration is less than expected risk; Policy risk.
