Event: the company released the 2021 annual report, achieving operating income of 2.694 billion yuan (+ 15.52%), net profit of 363 million yuan (+ 11.08%), and non-return net profit of 355 million yuan (+ 18.46%).
At the same time, the quarterly report for 2022 was released, with operating income of 682 million yuan (+ 15.73%), net profit of 131 million yuan (+ 35.41%) and non-return net profit of 105 million yuan (+ 15.99%).
The plaster continues to grow, and the core varieties are stable. In 2021, the income of plaster was 1.624 billion yuan (+ 14.64%); sales of Tongluo Qutong ointment, the core variety, increased by 11.4%, and sales in medical institutions increased by 15%; sales of Zhuanggu Musk pain Ointment increased by 8.51%, the best growth rate in recent years. Driven by price increases and high gross margin upgrade products, revenue and gross profit are expected to grow faster.
Capsules and other varieties continue to release, and the profitability of ointment is improved. Among other products, capsule income is 666 million yuan (+ 15.90%), mainly due to the steady growth of Peiyuan Tongnao capsule and Shenqi Jiangtang capsule. Tablet income 148 million yuan (+ 36.59%), mainly due to Danlu Tongdu tablets (indications for promoting blood circulation and removing blood stasis in the treatment of lumbar disc herniation, lumbar degenerative diseases, etc.) formed a good synergistic effect with plaster, and sales increased rapidly. The ointment income is 121 million yuan (- 10.34%), but the ointment subsidiary antelope Rui biology achieves a net profit of 33.34 million yuan (+ 22%), and the profitability is actually still improving.
The rate of sales expenses has declined steadily, the operating cash flow has performed well, and the quality of profits has been greatly improved. In 2021, the company improved the efficiency of marketing activities through fine management of expenses. The rate of sales expenses was 48.29%, down 2.39 percentage points from the same period last year. In 2021, the net operating cash flow of the company was 846 million yuan, far exceeding the net profit, continuing the trend that the net operating cash flow is greater than the net profit since 2018. We believe that it is mainly due to the change in the sales and management mode of the OTC industry, the ability to control the production plan, channel inventory and product sales flow has been enhanced, and the operation quality has been greatly improved. In the medium and long term, the company's performance is more stable and growing than cyclical.
Profit forecast and valuation: the company also announced that the profit distribution plan for 2021 is to distribute a cash dividend of 0.5 yuan per share (including tax). The current dividend yield has a high margin of safety. We estimate that the company's revenue from 2022 to 2024 will be 31.19,35.12 and 3.918 billion yuan respectively, with year-on-year growth rates of 15.8%, 12.56% and 11.6%, respectively. The net profit of home will be 4.48,5.31 and 627 million yuan, with a year-on-year growth rate of 24.0%, 18.4% and 18.2%. Based on the closing price on April 27, the PE corresponding to 2022 profits will be 13.5 times, giving a "buy" rating for the first time.
