I. Overview of events
On August 28, the company released its 2018 semi-annual report: revenue, return net profit and deducted non-net profit were 16.959 billion, 2.605 billion and 2.582 billion respectively, an increase of 27.88%, 21.06% and 20.32% respectively over the same period last year. 0.528 yuan.
II. Analysis and judgment
The accelerated layout of Wisdom Pharmacy promotes the rapid expansion of pieces of traditional Chinese medicine, and the gross profit margin increases steadily.
In the first half of the year, the company's performance was stable. The revenue of the core business of prepared pieces of traditional Chinese medicine reached 3.827 billion, an increase of 41.88% over the same period last year, which is expected to mainly benefit from the accelerated layout of intelligent pharmacies. The trade sector grew steadily, of which the revenue of traditional Chinese medicine and medicine trade reached 4.803 billion and 4.904 billion respectively, up 26.20% and 10.14% respectively. The coverage area of medical device distribution business was further expanded, and the operating brands expanded to non-orthopaedic and domestic brands, with revenue of 1.345 billion in the first half of the year, an increase of 67.76% over the same period last year. Homemade medicine, health food, food, property rental and other businesses increased by 78.78%, 7.27%, 35.94% and 65.94%, respectively. The operating cash flow in the first half of the year was about 452 million, down 57.57% from the same period last year, mainly due to the increase in payments for goods purchased by the company. The company's gross profit margin is about 30.17%, an increase of 0.45pct over the same period last year, of which the gross profit margin of prepared pieces of traditional Chinese medicine reached 36.40%, an increase of 3.53pct over the same period last year, which is expected to come mainly from the popularity of intelligent pharmacies; the gross profit margin of trade in traditional Chinese medicine is 25.72%, an increase of 1.05pct over the same period last year.
Continue to promote the construction of intelligent pharmacies across the country, expand equipment distribution, and seize the medical terminal market.
By increasing the layout of wisdom pharmacy and wisdom medicine cabinet, the company promotes the rapid development of traditional Chinese medicine slices in its core business. At present, the company has signed contracts with hundreds of medical structures across the country, and has connected a large number of grass-roots community health care institutions across the country. in the future, we will continue to promote the construction of wisdom pharmacies in Guangzhou, Shenzhen, Beijing, Shanghai, Chengdu, Puning, Kunming, Chongqing, Guiyang, Xiamen, Meihekou and other cities. On the basis of Wisdom Pharmacy, the company strengthens and improves the "Wisdom + Great Health" medical system, on the one hand, integrates high-quality resources to build the company's regional medical device sales platform, and expands the medical equipment distribution business, on the other hand, deepens the participation in the reform of public hospitals, invests and manages public hospitals to supplement medical resources, seizes the terminal market, and works together to build a closed loop of the whole industry chain around the two major industries of traditional Chinese medicine and big health in the future.
Third, profit forecast and investment suggestions
The company's business of prepared pieces of traditional Chinese medicine has benefited from the growth of the industry, and the expansion of wisdom pharmacies has accelerated the integration. It is estimated that the EPS1.01 in 1820 is 1.22,1.47 yuan, and the corresponding PE is 20.5,16.9 and 14.0 times. Company PEG
