Garden biology publishes its annual report for 2021. In 2021, the company achieved an operating income of 1.117 billion yuan, an increase of 69.40% over the same period last year, and a net profit of 480 million yuan, an increase of 82.29% over the same period last year.
Revenue and profits rose in 2021 compared with the same period last year. 1) the company's sales gross profit margin increased by 10.31 percentage points year-on-year to 68.66%. 2) the rate of sales, management (including research and development) and financial expenses increased by 13.99%,-7.11% and-1.73% to 16.41%, 12.41% and-1.26% respectively in 2021. In total, the expense rate of the three items increased by 5.15 percentage points to 27.57%. The increase in the rate of sales expenses is mainly due to the substantial increase in the operating income of Garden Pharmaceutical acquired in this period and the corresponding increase in marketing expenses.
The acquisition of 100% stake in Garden Pharmaceutical, the new pharmaceutical business, the rapid growth of profits. The transaction of the company's acquisition of 100% equity in Garden Pharmaceutical was completed, and Garden Pharmaceutical became a wholly owned subsidiary of the company. The company's new pharmaceutical manufacturing business, the main pharmaceutical products are valsartan amlodipine tablets, doxophylline injection, lipoic acid injection, levofloxacin tablets, escitalopram oxalate tablets and so on. This acquisition will help the company to extend vertically to the downstream pharmaceutical field efficiently and quickly on the basis of the existing vitamin D3 industry chain, broaden the company's business scope, enhance the company's profitability, and further consolidate the company's core competitiveness. In 2021, the gross profit margin of the company's pharmaceutical manufacturing sector was 79.14%, accelerating the growth of the company's profits.
Change the traditional distribution model to entrust promotion, focus on product research and development, and promote the increase of product sales revenue. In 2021, Garden Pharmaceutical Company changed its traditional distribution model to entrust professional promotion service companies to implement regional channel development, marketing and other activities, and the company will focus more on product research and development and quality control. The change in the company's promotion and distribution model further promoted the increase in product sales revenue, with the product gross profit margin rising by 48.58% over the same period, while channel development, marketing, and other related expenses increased by 20.88% over the same period, resulting in an increase in the company's overall sales expenses.
There are advantages in production technology. The company's existing three core production processes: vitamin D3 production process, NF cholesterol production process, 25-hydroxyvitamin D3 production process, are in the domestic or international leading level. The company has established a provincial high-tech enterprise research and development center, and established a provincial academician expert workstation (national demonstration academician expert workstation) and provincial postdoctoral workstation. Through continuous R & D investment, improve the R & D strength and technological level, establish the company's leading production process and technological advantages in the industry.
Profit forecast and reference rating. We estimate that the EPS of the company from 2022 to 2024 will be 0.90,1.19,1.50 yuan respectively. With reference to the valuation of comparable companies in the same industry, we think that the reasonable valuation range is 18-20 times PE in 2022, corresponding to a reasonable value range of 16.20-18.00 yuan, with a rating of "better than the market".
Risk hint. In the construction capacity put into progress is not up to expectations, vitamin D3 and other product prices fluctuations, raw material price fluctuations, macroeconomic decline.
