Revenue increased by 8.25% in the first half of the year; net profit increased by 32.48% in the first half of the year; the company announced that it realized revenue of 2.452 billion yuan, an increase of 8.25% over the same period last year; realized net profit of 324 million yuan, an increase of 32.48% over the same period last year; and realized net profit of 316 million yuan after deducting non-return to the mother, an increase of 30.09% over the same period last year. The company's net operating cash flow in the first half of the year was 249 million yuan, an increase of 39.55% over the same period last year.
Continue to deepen channel expansion, focusing on creating gold products
In terms of products: drug revenue was 2.142 billion yuan, an increase of 7.69% over the same period last year, gross profit margin slightly decreased 1.32pp to 41.86%, revenue from health-related products was 284 million yuan, an increase of 6.13% over the same period last year, and gross profit margin increased 9.50pp to 48.39%. In 2019, the company continues to promote marketing model innovation, Internet application innovation, enhance brand value. The company adheres to the development direction of "branding of direct supply terminals and diversification of sales channels", deepens the expansion of chain and medical channels and network channels, and optimizes the structure of sales varieties, focusing on creating its own gold items or key varieties. by increasing the marketing efforts of independent brand varieties, the company has raised the overall gross profit margin. According to the company's 2018 annual report, the company carries out comprehensive innovation around Renhe, Fuyanjie, Renhe Creek, Yucadan and Shining five major brands, making in-depth communication between brand promotion and consumer emotional value, using younger promotion carrier techniques to give the brand a new look and improve business quality and profitability.
According to the company's 2018 annual report, the company promoted the research and development of 16 classic prescriptions and the consistency evaluation of 6 key varieties in 2018, carried out 80 key technical projects, and completed 47 new products on the market, and the product group will continue to be rich in the future.
During the reporting period, the company's expenses were well controlled: the sales expenses were 415 million yuan, down 7.84% from the same period last year; the administrative expenses were 169 million yuan, up 12.00% from the same period last year; the financial expenses were-20 million yuan, and the interest income was increased.
More than 200 varieties have entered the new medical insurance.
In the adjustment of the new health insurance catalogue: a total of 220 products have entered the national health insurance catalogue, including 110 chemical drugs, 70 class An and 40 class B. the key products are amlodipine besylate tablets, gliclazide sustained-release tablets, compound licorice tablets, dextromethorphan hydrobromide syrup and so on. There are 110 proprietary Chinese medicines, 48 in Class An and 62 in Class B. the key varieties are: Dahuoluo capsule, Dahuoluo Pill, Angong Niuhuang Pill, Liuwei Dihuang Pill, Tongqiao rhinitis capsule, Xiaoer Yanbian granule, Jianer Qingjie solution, Qiangli Loquat capsule and so on. It is expected to actively promote the follow-up sales of related drugs and the long-term development of the company.
Be optimistic about the steady development of the company and maintain the "buy" rating
The company continues to promote marketing model innovation, strengthen its own variety marketing efforts, and is expected to continue to improve profitability. Based on the company's good performance, we slightly adjust the company's profit forecast. It is estimated that the company's EPS in 2019-2021 will be 0.53,0.66 and 0.81 yuan respectively (of which in 1920, the EPS will be increased by 0.37% 2.36% compared with the last time), and the corresponding valuation will be 14, 11 and 9 times, respectively. Maintain the "buy" rating.
Risk hint: the market promotion of brand products is not as expected; the competition of products in various fields is intensified.