Comments:
Company performance: according to the company's annual report, 2016 of the company achieved a total operating income of 41.25 billion yuan and a net profit of 1.19 billion yuan. According to the reorganized merger caliber, it was traced back to YOY+9.1% and + 27.9% respectively. After deducting the 120 million investment income obtained from the sale of Suzhou Zhijun's equity, the non-net profit increased by 17.3% compared with the same period last year. The company's performance is consistent with the performance of KuaiBao, in line with expectations. The company plans to hand out 3.3 yuan in cash for every 10 shares.
The distribution business grew steadily, and the performance of Guoda Pharmacy was better than expected: the company's distribution business achieved revenue of 31.14 billion yuan, YOY+9.9%, recorded a net profit of 600 million yuan, and YOY+10.2%, achieved steady growth. among them, the three distribution companies all fulfilled their performance commitments, merged revenue of 4.95 billion yuan, contributed net profit of 110 million yuan, and the company's original distribution business achieved revenue of 26.2 billion yuan, YOY+8%. With a net profit of 500 million, YOY+13%, 's distribution business is relatively robust. We believe that after the completion of the restructuring, the company will become the leading pharmaceutical business in Guangdong and Guangzhou. With the deepening of integration and the promotion of the two-vote system, the company's performance will continue to grow steadily. The company merged into the National University pharmacy with an operating income of 9.1 billion yuan and a net profit of 170 million yuan, far exceeding the promised 98 million yuan, and the net interest rate increased by 0.8% to 1.8% compared with the same period last year. The company will directly benefit from the trend of "separation of medicine and medicine" by merging into the National University Pharmacy, which will directly benefit from the trend of "separation of medicine and medicine". However, at present, there is still a certain gap between the net interest rate and the average level of the industry. with the strengthening of management, the net profit level of National University pharmacy will be improved.
Profit forecast: considering the dilution factor, we expect the company's net profit in 2017 to be 1.33 billion yuan (YOY+11.8%) / 1.58 billion yuan (YOY+18.9%), EPS 3.10 yuan / 3.68 yuan, corresponding A-share PE 25 times / 21 times, corresponding B-share PE 13 times / 11 times. After the integration, the company will become the retail leader of the country and the distribution leader of the two regions, and will benefit from the industry trend of increasing industry concentration and separation of medicine and medicine in the future. In addition, as a holding subsidiary of the state-owned pharmaceutical department, the company benefits from the mixed ownership reform of state-owned enterprises, which is expected to further improve operational efficiency and achieve higher net interest rates. At present, the valuation of A shares of the company is reasonable, but taking into account the current market preferences, we have raised to the "buy" investment recommendation; B shares have a low valuation and maintain the "buy" investment recommendation.
