The company recently released its annual report for 2021: operating income of 5.322 billion (+ 14.70%), net profit of 115 million (- 46.88%) and non-return net profit of 102 million (- 55.58%) during the reporting period. From the perspective of the fourth quarter, the company achieved operating income of 1.607 billion, net profit of + 5 million and non-return net profit of + 3 million in the fourth quarter.
In the first quarter of 2022, the operating income was 1.587 billion (+ 33.99%), the return net profit was 50 million (+ 31.61%), and the non-return net profit was 53 million (+ 61.6%).
Comments:
Deeply ploughing the provincial market and steadily expanding the market outside the province. During the reporting period, 1344 new stores were added, including 463 self-built stores, 281 mergers and acquisitions stores, 3 stores closed, and 2592 stores directly operated by the end of the reporting period, an increase of 40.03% over the same period last year. With the Shandong market as the core, the company focuses on the regional expansion north of the Yangtze River. at the end of the reporting period, there were 749 licensed drugstores and 603 new licensed drugstores for the whole year. Shu Yu Health joining network has been formed covering Shandong, Liaoning, Heilongjiang, Jilin, Henan, Hebei, Tianjin, Jiangsu, Anhui and Shanxi.
The construction of professional pharmacy continues to make efforts. The company continues to strengthen the application and construction of courtyard stores, dual-channel qualified stores, up-to-standard pharmacies and other projects, so as to undertake the prescription drainage of specialty products through perfect offline store channels. During the reporting period, 48 designated special medicine pharmacies for serious diseases and more than 270 courtyard shops were opened in Shandong Province, and the annual sales volume of DTP business, including tax, exceeded 740 million yuan.
Stores are expanding at a high speed and gross profit margins fluctuate slightly. The average daily efficiency, including tax, will reach 51 yuan per square meter in 2021 and 62.88 yuan per square meter in 2020, which is caused by the rapid expansion of stores. We are optimistic about the performance contribution brought by the transformation from new stores to old stores. During the reporting period, the company's main business revenue was 5.286 billion, an increase of 14.33% over the same period last year. In terms of categories, Chinese and Western proprietary medicines achieved business income of 3.874 billion (+ 23.12%), gross profit margin of 22.00% (- 2.25BP), accounting for 72.80% of income, while prepared pieces of traditional Chinese medicine achieved business income of 350 million (+ 17.33%), accounting for 6.58%. Non-drug realized operating income of 1.062 billion, accounting for 20.09% of revenue.
Profit forecast: the company is the leader of chain pharmacies in Shandong Province. under the high-speed expansion of stores, it is optimistic that the transition from new stores to old stores will bring performance contribution. From 2022 to 2024, we expect the company to achieve an income of 69.46 pounds 83.56 billion yuan and a net profit of 1.45 pounds per share and a net profit of 1.81 million yuan per share, corresponding to 0.36 pounds per share. Comprehensive industry average valuation level, for the first time to cover the company's "overweight" investment rating.
Risk tips: repeated risk of epidemic, performance forecast and valuation are not up to expectations, etc.