Events:
Walter Dain released the third quarterly report for 2022:
In the first three quarters of 2022, the company achieved operating income of 1.819 billion yuan (+ 15.67%), net profit of 462 million yuan (+ 45.10%) and sales expenses of 296 million yuan (+ 15.72%).
In 2022, Q3, the company achieved operating income of 594 million yuan (+ 5.79%), net profit of 158 million yuan (+ 76.36%), and sales expenses of 90 million yuan (- 22.92%).
In the first three quarters of 2022, Dain Pharmaceutical achieved operating income of 1.605 billion yuan (+ 40.47%), net profit of 831 million yuan (+ 48.52%), and net interest rate of 51.78%.
In 2022, Dain Pharmaceutical Q3 realized operating income of 526 million yuan (+ 33.58%), net profit of 283 million yuan (+ 68.83%), and net interest rate of 53.80%.
Main points of investment:
Q3 sales expenses are significantly reduced, and profitability is significantly enhanced. In 2022 Q3, the company's sales expense was 90 million yuan (the sales expense rate was 15.13%), which was 22.92% lower than that of 116 million yuan in the same period in 2021 (the sales expense rate was 20.76%). The reduction of expenses increased the company's profit level.
The price of Ike's new mainstream specifications will be raised to further strengthen cooperation with channel terminals. In 2022-7-15, the company raised the price of Ike, which has the highest sales of 30 pieces per box, by 6.4%. In addition, the company will use part of the profits from the price increase to cooperate with the channel terminal, which will not only increase Ike's new sales, but also expand the vitamin AD market.
The new applicable population of Ikexin has been expanded to 6 years old, and there is a broad space for incremental market. Based on sufficient evidence-based medicine, the company's new age range has been adjusted from 0-3 to 0-6, bringing about 52.97 million new consumers.
The new permeability of pink Yike is still at a low level, and there is much room for improvement. As of 2022H1, the penetration rate of green ikexin (for children aged 0 to 1 years) is more than 30%, but that of pink clothes (1 to 3 years old) is about 10%. Overall, the penetration rate of ikexin among children aged 0 to 6 years old is only about 8%. Pink is expected to contribute the main growth driver in the future.
Profit forecast and investment rating: considering that with the further improvement of green Yike's new penetration, we expect its sales growth rate to gradually slow down, so we downgrade this sales growth forecast and downgrade the company's revenue growth forecast. In addition, with the improvement of the company's gross profit margin, we also raise the company's home net profit growth forecast. It is estimated that the company's operating income from 2022 to 2024 will be 2.297 billion yuan, 2.795 billion yuan and 3.361 billion yuan respectively, an increase of 13%, 22% and 20% over the same period last year. The net profit of homing was 553 million yuan, 667 million yuan and 797 million yuan respectively, up 46%, 21% and 19% over the same period last year. In the long run, pink Ikexin is expected to contribute new growth momentum. Maintain a "buy" rating.
Risk tips: Ikexin sales are not as expected; medical policy risks; the epidemic affects the normal operation of drugstores; market competition intensifies; macroeconomic development is not as expected.