The performance fell 65.23% in 2019, and 93.48% in the first quarter affected by the epidemic. The company released its 2019 annual report: the company's revenue for the current fiscal year was 1.217 billion yuan, down 24.81% from the same period last year, and its net profit was 130 million yuan, down 65.23% from the same period last year. The net profit after deducting non-return to the mother was 112 million yuan, down 70.30% from the same period last year. On a quarterly basis, Q4 achieved revenue of 363 million yuan in the current fiscal year, down 39.22% from the same period last year. The net profit returned to the mother was-43.7376 million yuan, down 129.53% from the same period last year, and the net profit after deducting non-return was-43.8933 million yuan, down 128.72% from the same period last year. The net cash flow generated by the company's operating activities was-141 million yuan, an increase of 157 million yuan over the same period last year, mainly due to an increase of 182 million yuan in cash received from sales rebates.
At the same time, the company released its quarterly report for 2020: revenue was 225 million yuan, down 17.10% from the same period last year, net profit was 27.573 million yuan, down 51.89% from the same period last year, and net profit after deduction was 28.3007 million yuan, down 32.5% from the same period last year. Mainly due to the impact of the macroeconomic downturn and the COVID-19 epidemic, we expect the company's future performance to pick up as the epidemic is gradually brought under control.
The sales revenue of main products has declined, and the revenue of health wine is + 43% in 2019. The revenue of ① pharmaceutical industry is 1.059 billion yuan,-29.16% compared with the same period last year, which is mainly affected by the domestic macro-economic downturn, consumption degradation, national health insurance control fees, prescription drug regulation and other industry policies, and the company's sales support to some key commercial customers is carried out in the way of discount. The gross profit margin of the pharmaceutical industry is 81.95%, year-on-year-2.00pp, mainly because the acquisition costs of the main raw materials, such as velvet antler, hippocampus, dragonfly, etc., have increased compared with the same period last year, Dingkundan and Guilingji updated product packaging, and the prices of some packaging materials have increased slightly. The income of traditional Chinese medicine in the pharmaceutical industry is 949 million yuan, year-on-year-25.89%, gross profit 81.33%, year-on-year-1.87pp, high-quality traditional Chinese medicine income 109 million yuan, year-on-year-48.8%, gross profit 87.33%, year-on-year-1.16pp. ② pharmaceutical commercial income is 80.75 million yuan, year-on-year + 16.60%, gross profit margin 32.55%, year-on-year + 3.06pp, mainly because the company continues to plough the hospital business in Tibet and continues to expand the development of township, county and city channels, resulting in a continuous increase in pharmaceutical commercial revenue. At the same time, with the increase in the proportion of varieties with higher gross profit margin, the gross profit margin has increased. The revenue of ③ health wine was 75.15 million yuan, + 43.00% compared with the same period last year, mainly because the company set up a new medicine canal marketing team for the health wine business and adopted innovative marketing models to expand sales, as well as incremental contributions to new products; gross profit margin 68.03%, year-on-year-0.70pp, mainly due to the increase in the price of package materials for some products and the increase in manufacturing costs after the new factory was put into operation.
In 2019, the company's gross profit margin was 77.79%, down 3.33pp from the same period last year, and the net profit rate was 11.28%, down 13.06pp from the same period last year. During the reporting period, expenses accounted for 61.21%, an increase of 11.94pp over the same period last year, including sales expense rate of 44.49%, year-on-year increase of 5.66pp, management expense rate of 13.89%, year-on-year increase of 4.34pp, financial expense rate of 2.83%, year-on-year increase of 1.95pp, R & D expense rate of 5.15%, an increase of 1.54pp.
Actively promote sales and promotion, and continue to promote R & D projects.
In terms of marketing, on the one hand, the company actively promotes the reform of marketing management and business model, promotes the transformation of digital marketing, takes terminal sales growth as the first assessment goal, and actively develops the third terminal such as the county market, and explores and practices Internet sales models such as e-commerce; on the other hand, the company strives to improve the level of fine management, promote the digital upgrading of the company's business processes, and improve the company's operational efficiency. By the end of 2019, the company's products have covered more than 14000 hospital terminals (including out-of-hospital pharmacies and investment promotion), established more than 1000 chain pharmaceutical enterprises with long-term cooperation, and managed nearly 50,000 chain terminal stores. the products cover nearly 150000 chain terminal stores.
In 2019, the company completed a total of 34 R & D projects, with R & D investment of 64.0351 million yuan, and published nearly 40 related research papers, including 5 papers in SCI journals. During the reporting period, the company's main R & D projects included Dingkun Dan non-clinical safety evaluation and toxicology study, Dingkun Dan multicenter clinical trial in the treatment of endometriosis, the protective effect and mechanism of Dingkun Dan on mitochondrial DNA oxidative damage in oocytes with ovarian dysfunction, Guilingji non-clinical safety evaluation and toxicology research, and the joint laboratory of Guilingji classic prescription secondary development, etc., through academic research and promotion Help to enhance brand awareness, so that more consumers understand and understand the company's products.
Be optimistic about the future development of the company and maintain its "buy" rating
Affected by the overall macroeconomic downturn and changes in industry regulatory policies, the company's product sales did not meet expectations; in addition, the company's sales support to some key commercial customers was carried out in the way of ticket discount, which affected the company's sales revenue. Considering that the company's revenue was affected by COVID-19 's epidemic in the first quarter, we reduced our 2020-2021 net profit from 3.76 and 445 million yuan to 1.63 and 204 million yuan, with an increase of 246 million yuan in 2022 net profit, corresponding to 37, 29 and 24 times PE, respectively. We are optimistic about the future development of the company and maintain the "buy" rating.
Risk tips: the impact of macroeconomic and medical policies; terminal mobile sales are lower than expected; multi-channel promotion model leads to higher sales costs
