In the first three quarters, revenue fell 16% compared with the same period last year, and the net profit returned to the home decreased by 23%.
The company released three quarterly results: revenue in the first three quarters was 854 million yuan, down 16.39% from the same period last year, and the net profit was 174 million yuan, down 23.09% from the same period last year. The net profit after deducting non-return was 156 million yuan, down 30.38% from the same period last year. Of this total, revenue in the third quarter was 313 million yuan, down 14.68% from the same period last year, and the net profit returned to the mother was 56.5233 million yuan, down 30.84% from the same period last year. The overall performance is in line with market expectations. The net cash flow generated by the company's operating activities in the first three quarters was-129 million yuan, compared with-270 million yuan in the same period last year.
It is expected that the channel inventory will continue to be consumed, and the terminal income will grow well.
In the first three quarters, due to the impact of the overall macroeconomic downturn and changes in industry regulatory policies, and the company's sales support to some key commercial customers in the reporting period, the company's overall revenue declined. During the reporting period, the purchase prices of the company's main raw materials and packaging materials increased slightly compared with the same period last year, and the depreciation expenses for fixed assets and fuel power increased accordingly, resulting in a decrease in the gross profit margin of the products. The gross profit margin of the company in the first three quarters was 78.17%, down 4.03 ppm from the same period last year; on the other hand, the company stepped up its research and development efforts, and its R & D expenses increased by 16.33% compared with the same period last year. At the same time, the company broadened the financing channels so that during the reporting period, the financial expenses such as the negotiation fee of the letter of credit, the interest on bank loans and the discount on acceptance bills increased by 187.18% over the same period last year, so the net profit decreased by 30%.
In terms of period expenses, the sales expenses, management expenses and financial expenses in the first three quarters were 319 million, 75 million and 25.9504 million respectively, accounting for 37.31%, 8.76% and 3.04% of the total income, respectively, compared with the same period last year-4.25pp, + 1.60pp, + 2.16pp. In the first three quarters, R & D expenditure was 32.1881 million, accounting for 3.77% of total revenue, year-on-year + 1.06pp. The net interest rate in the first three quarters was 21.46%, down 1.71pp from the same period last year.
The company continues to optimize and upgrade terminal marketing, according to the company's semi-annual report: the company added more than 460 new hospital terminals in the first half of the year, strengthening academic promotion, driving the steady improvement of hospital terminal sales, chain aspects, the first half of the year around 100 million health, Gaoji, one heart, big ginseng forest, Neptune Xingchen, ordinary people, national university pharmacy and other top10 core chains and stores comprehensive upgrade professional training, display, consumer education and persistent promotion activities Promote the terminal sales of drugstores to achieve rapid growth. At the same time, the company extends the commercial network to the prefecture and county market, and the future prefecture and county commerce, small chain and the third terminal will be another key channel for the development of traditional Chinese medicine business. We believe that with the continuous in-depth expansion of the company's channels and the sustained and rapid growth of terminal mobile sales, the company's channel inventory is expected to continue to digest, drive the continuous improvement of the company's business quality, and is expected to accelerate the arrival of the performance inflection point.
The company is expected to continue to optimize its operations and maintain its "buy" rating.
Affected by the overall macroeconomic downturn and changes in industry regulatory policies in the first three quarters, the company's overall income has declined. It is expected that the annual net profit in 19-20-21 will be slightly reduced from 412 to 3.19, respectively, from RMB 412 to RMB 467 million, EPS to RMB 0.65 to RMB 0.76 in 2019-2021, and PE to 25, 21 and 18 times, respectively, to maintain the "Buy" rating.
Risk tips: the impact of macroeconomic and medical policies; terminal sales are less than expected leading to a continuous increase in accounts receivable; multi-channel promotion model leads to higher sales costs; the release of new capacity is less than expected.
