Event: the company issued a half-year performance forecast for 2023, and the first half of the year is expected to achieve a net profit of 4.9-530 million yuan, an increase of 22.2% over the same period last year. In the second quarter alone, the net profit is expected to be 3.2-360 million yuan, an increase of 12.1% over the same period last year.
Q2 performance slightly exceeded expectations. 1) the company promotes fine management, continues to stabilize and expand the cooperative relationship with upstream and downstream customers, and actively enhances the pharmaceutical commercial marketing ability; 2) the company continues to increase investment in equipment and consumables, and the related business has achieved significant growth; 3) the company's new businesses such as e-commerce, import distribution and traditional Chinese medicine health care have also grown to a certain extent.
Based on the southwest, accelerate the national network layout, multi-regional market share leading. By the end of 2022, the company's commercial network has covered 31 provinces (municipalities and autonomous regions), with more than 200 sub-molecular companies. "Endogenous growth + epitaxial mergers and acquisitions" promotes the steady expansion of the national sales network and leads the market share in many regions of the country, including more than 6 billion yuan in Sichuan, Shaanxi and Chongqing, and 5 billion yuan in Guizhou. Hubei, Henan and other regions have sales of more than 3 billion yuan. Chongqing's "base camp" has achieved more than 95% coverage of second-level and above medical institutions, and Chongqing's market share is as high as 60% to maintain its leading position. The 14th five-year Plan puts forward the strategic goal of "300 cities": in addition to completing the blank layout of provincial capitals, we will complete the goal of newly established or mergers and acquisitions of enterprises in more than 300 prefecture-level cities across the country.
Optimize the business structure and build the development engine. 1) actively promote the business of high-hair equipment. In 2022, the company promoted 8 SPD projects in Sichuan, Liaoning, Shaanxi and Guangzhou, with more than 110 companies carrying out equipment business. In the future, the company will firmly grasp orthopaedics, assisted reproduction, disinfection supply and other market segments, build equipment market segmentation platform, actively promote SPD projects, and expand market share. 2) deepen the circulation business of traditional Chinese medicine and extend the industrial chain upstream. About 130 companies under the company have the qualifications for the management of traditional Chinese medicine and prepared slices of traditional Chinese medicine, and carry out cooperative planting and sales of traditional Chinese medicine, intelligent decocting center, wisdom center pharmacy and co-construction of traditional Chinese medicine departments. In addition, it has a traditional Chinese medicine formula granule production enterprise (put into production in 2023) and a traditional Chinese medicine prepared piece production enterprise (trial production stage, with a capacity of 5000 tons / year).
With the deepening of the reform of state-owned enterprises, business assessment indicators are expected to be further refined. Closely around the general strategic guiding ideology of "1200 double three hundred cities, Sanhua four Energy and five Route Army", we will continue to optimize the industrial structure, create new advantages for development, build a new pattern of development, and activate the momentum of enterprise growth.
Profit forecast and investment advice. It is estimated that the net profit from 2023 to 2025 will be 1.12 billion yuan, 1.31 billion yuan and 1.52 billion yuan, respectively, with a year-on-year growth rate of 17.7%, 16.6% and 16.5%, respectively, and the corresponding PE is 16.5% times that of 10-8-7. Maintain a "buy" rating.
Risk hints: the risk that M & An enterprises fall short of expectations; the risk of rising financing costs; the risk of collection and reduction of prices; the risk that the payback is not as expected.