\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 085 Beijing Tongrentang Co.Ltd(600085) )
Event:
Beijing Tongrentang Co.Ltd(600085) released the first quarterly report of 2022: in the first quarter of 2022, the company achieved an operating revenue of 3.954 billion yuan (+ 6.67%), a net profit attributable to the parent company of 400 million yuan (+ 25.61%), and a net profit not attributable to the parent company of 396 million yuan (+ 25.14%).
Key investment points:
The performance grew steadily, and the net profit attributable to the parent company increased faster than expected. In the first quarter of 2022, Omicron swept many provinces in China. The company forged ahead, realizing an operating revenue of 3.954 billion yuan (+ 6.67%), a net profit attributable to the parent company of 400 million yuan (+ 25.61%), and deducting a net profit not attributable to the parent company of 396 million yuan (+ 25.14%).
Product price increase and operation improvement promoted the steady growth of gross profit margin. In the first quarter of 2022, the company's gross profit was 48.25%, an increase of 1.52% over the same period last year (46.73%). On the one hand, the driving force for the growth of gross profit comes from the general price increase of the company's products. Among them, the price of shuangnatural Angong Niuhuang Pill, a pillar product, increased by 10% at the end of last year. During the reporting period, the price increase has been fully reflected in online and offline retail terminals. Another driving force for the growth of gross profit margin is the effective control of operating costs brought by business improvement. In the first quarter of 2022, the company's operating cost was 2.046 billion yuan, an increase of only 3.62% over the same period last year (1.974 billion yuan).
Optimize the cost structure and increase investment in sales and R & D. the company's marketing reform is intended to deepen the brand moat and promote the simultaneous rise of quantity and price of large varieties. On the one hand, the company increased the publicity of products and actively carried out the secondary R & D and cultivation of large varieties. On the other hand, the company further reduced the management and financial expenses and optimized the cost structure. In the first quarter of 2022, the company's sales expense was 784 million yuan (+ 11.57%); The R & D cost is 325 million yuan (+ 107.24%); Administrative expenses of RMB 354 million (- 1.87%); Financial expenses are 3.09 million yuan (- 59.65%).
The net cash flow from operating activities remained basically stable. In the first quarter of 2022, the net cash flow from operating activities of the company was 934 million yuan, a year-on-year decrease of 3.11%, including cash inflow from operating activities of 4.435 billion yuan (+ 9.43%), cash outflow from operating activities of 3.501 billion yuan (13.34%), and the overall operation of the company was stable.
Profit forecast and investment rating Beijing Tongrentang Co.Ltd(600085) as a "landmark" brand in the field of traditional Chinese medicine, it has a strong brand moat, stable and rapid growth of core products, continuous improvement of product prices, deepening of marketing reform, and high-speed growth of annual performance and profit is expected. It is estimated that the company's revenue in 2022, 2023 and 2024 will be 16.681 billion yuan / 19.018 billion yuan / 21.544 billion yuan respectively, with a year-on-year increase of 14% / 14% / 13%. The corresponding net profit attributable to the parent company was 1.483 billion yuan / 1.775 billion yuan / 2.086 billion yuan respectively, with a year-on-year increase of 21% / 20% / 18%. The corresponding PE valuation is 33.88x/28.30x/24.08x. Continuous coverage and "buy" rating.
Risk warning: the sales promotion of key products is less than the expected risk. The risk of reducing the gross profit of products due to excessive price rise of raw materials. The risk that the price increase of the product is less than expected. The epidemic has a wide range and the risk of affecting product sales. Lower than expected risk of store expansion.
