\u3000\u3000 Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) (600436)
Key investment points
Event: the company released the annual performance express for 2021, and realized the total operating revenue, net profit attributable to parent company and net profit deducted from non attributable to parent company were RMB 8.026 billion, RMB 2.433 billion and RMB 2.430 billion respectively, with a year-on-year increase of 23.27%, 45.55% and 52.93% respectively..
The market promotion was strengthened, the development of cosmetics was accelerated, and the company’s operating revenue increased quarter by quarter: the company’s total operating revenue increased by 23.27% year-on-year in 2021, mainly due to the expansion of sales scale caused by strengthening market planning and expanding sales channels, In addition, the sales revenue of Xiamen Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) Hongren Pharmaceutical Co., Ltd. (merger) and Fujian Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) Cosmetics Co., Ltd. (merger) increased. In terms of single quarter, Q1 / Q2 / Q3 / Q4 company achieved operating revenue of RMB 20.02/18.47/22.63/1.914 billion respectively in 2021, with a year-on-year increase of 16.76% / 20.57% / 24.09% / 32.82% respectively, and the revenue growth of the company accelerated quarter by quarter.
Expansion of marketing channels, addition of online flagship stores and improvement of the company’s profitability: since the third quarter of 2021, on the one hand, the company has stabilized the price system of Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) pastille by stabilizing supply and standardizing terminal sales. On the other hand, the company increased its own sales channels, expanded market promotion, and added online marketing channels such as tmall flagship store of online Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) pharmacy and JD flagship store of Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) pharmacy, which increased consumer accessibility, increased the proportion of direct sales, and significantly improved the company’s profitability. In 2021, Q1 / Q2 / Q3 / Q4 company realized net profit attributable to parent company of RMB 5.65/5.50/896/422 million respectively, with a year-on-year increase of 20.84% / 38.54% / 93.08% / 23.03% respectively, and net profit attributable to parent company of 28.22% / 29.78% / 39.59% / 22.05% respectively. In 2021q4, the company realized a net profit of RMB 424 million, a year-on-year increase of 58.21%, and its performance was brilliant.
The company’s “one core and two wings” strategy has been steadily promoted, and cosmetics is expected to accelerate growth: in 2021, the company will continue to implement the “one core and two wings” great healthy development strategy, and strengthen the development of cosmetics, daily chemical products, health products and health food on the basis of consolidating the pharmaceutical manufacturing industry with Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) as the core. Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) cosmetics have now formed many brands such as ” Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) ” and “Queen”. Oral care has laid out the medium and high-end toothpaste market and launched oral care solutions. According to the company’s performance express, we believe that the company’s cosmetics is expected to achieve rapid development and actively contribute to the performance increment of the company.
Profit forecast and investment rating: considering that the expansion of the company’s market sales channels promotes performance growth and the increase of the proportion of direct sales helps improve the profit margin, we adjusted the forecast of the company’s net profit attributable to the parent company from RMB 2.509/3.009 billion to RMB 2.995/3.626 billion from 2022 to 2023, and the PE corresponding to the current market value is 78x / 64x respectively. Maintain the “buy” rating.
Risk tip: the development of cosmetics business may be lower than expected, and the supply and price of raw materials fluctuate.
