\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 23 Dong-E-E-Jiao Co.Ltd(000423) )
Recommendation logic: 1) the market scale growth rate of donkey hide gelatin industry remains at 10%, and it is expected to maintain a high outlook in the future; 2) The company is a leader in the donkey hide gelatin industry, with a market rate of more than 60%. The upstream donkey resources of the company are rich, and the price of products is expected to continue to rise in the future; 3) After the company cleaned up channels in previous years, the inventory decreased from 3.5 billion yuan to 1.5 billion yuan. At present, product delivery has begun to recover rapidly, and it is expected to continue to maintain rapid growth in the future.
The low performance has passed and ushered in a new starting point for growth. Since the listing of the company, the demand for donkey hide gelatin block, the core product of the company, has been strong, and the price has continued to rise, driving the rapid growth of the company's performance. Since 2018, due to the large backlog of channel inventory, the company began to clean up channel inventory and reduce delivery. The performance has decreased significantly in 2019. After more than two years of adjustment, the channel inventory has fallen to a low level. In 2021, the company's performance ushered in restorative growth, In 2021, the company's operating revenue reached 3.85 billion yuan, a year-on-year increase of 12.9%, and the net profit attributable to the parent company was 440 million yuan, a year-on-year increase of 917.4%.
The general trend of consumption upgrading and the return of donkey hide gelatin value continued. As a tonic with high price, the consumption upgrading of donkey hide gelatin will drive the growth of demand for donkey hide gelatin. The market scale of Chinese donkey hide gelatin increased from 19.6 billion yuan in 2013 to 53.5 billion yuan in 2020, with a compound growth rate of 15.4%. Donkey hide is the core raw material of donkey hide gelatin. At present, the stock of donkey hide has decreased from 9.444 million in 1996 to 2.234 million in 2020. It is expected that it will continue to decline in the future, and the price of donkey hide will remain at a high level. At present, the company has established 20 donkey medicine standard breeding demonstration bases in China and 100 poverty alleviation donkey farms in Liaocheng. On the basis of ensuring the supply of raw materials, the company continues to tap the added value of donkey. On the whole, the company has rich donkey resources and the leading position of donkey hide gelatin.
Qudaoqing inventory is coming to an end, and the main products are expected to start a new growth. Since the company began to launch the value return strategy, the price of donkey hide gelatin block, the main product, has continued to rise. The continuous rise in product prices has made dealers, pharmacies and consumers more inclined to buy more products at a relatively low price at one time. Therefore, the stock of the company's products in the channel and end consumers has become larger and larger, the company's inventory has continued to rise, up to 3.5 billion yuan, and the inventory turnover rate has continued to decline. From 2019, The company began to clean up the channel inventory and reduce the delivery. In 2021, the channel cleaning is coming to an end and began to resume growth. The company's three main products, donkey hide gelatin block, compound donkey hide gelatin paste and peach blossom Ji donkey hide gelatin cake, have strong product strength and are expected to continue to maintain rapid growth in the future.
Profit forecast and investment suggestions. It is estimated that the growth rate of net profit attributable to the parent company from 2022 to 2024 will be 123.6%, 26% and 19.7% respectively. On the whole, the company is the absolute leader in the donkey hide gelatin industry, and its product quality, brand strength and market share rank first in the industry. After the early channel inventory adjustment, it is expected to usher in sustained and steady growth, and the long-term development is worth looking forward to. Give the company 25 times PE in 2022, with the corresponding target price of 37.75 yuan. For the first time, give it a "buy" rating.
Risk warning: risk of product price reduction, risk of sales falling short of expectations, and other policy risks in the pharmaceutical industry.
