Event: the company released its 2023 semi-annual report. In the first half of 23, the revenue was 4.338 billion yuan (+ 44.29%), the net profit was 158 million yuan (+ 74.85%), and the revenue of Q2 in 23 years was 2.171 billion yuan (+ 39.52%), and the net profit was 82 million yuan (+ 38.38%).
Comments:
"self-built + acquisition" two-wheel drive, the number of stores expand at a steady pace. In the first half of 23, the company built 381 self-built stores and acquired 61 stores, with a net increase of 438 stores. By the end of June 23, the total number of stores of the company reached 4493, including 2577 stores in Yunnan Province and 61.53% of the total stores in Yunnan Province. We believe that the company takes Yunnan as the core to speed up the expansion of non-provincial markets, and the rapid growth of non-provincial markets can be expected in the future.
The main business is growing steadily, and Chinese and Western proprietary medicines lead the company to improve its performance rapidly. The company's income from various categories of H1 products in 23 years: 3.092 billion yuan (+ 55.47%) for proprietary Chinese and western medicines, 189 million yuan (+ 67.09%) for traditional Chinese medicine, 234 million yuan (+ 20.84%) for health food, 371 million yuan (+ 20.79%) for medical devices, and 197 million yuan (+ 6.67%) for life conveniences.
During this period, the expense rate has decreased, and the operating capacity has been continuously improved. The company's 23-year H1 gross profit margin is 34.81% (- 1.18pct), which is mainly affected by the increase in the proportion of prescription and over-the-counter drugs, and the lower gross profit margin of prescription drugs. The net interest rate of H1 company in 23 years is 3.59% (+ 0.70pct). The sales expense rate is 25.72% (- 1.63pct), the management expense rate is 2.03% (- 0.49pct), and the financial expense rate is 1.49% (+ 0.14pct).
During the period, the expense rate decreased and the level of net interest rate further increased.
Online channels maintain rapid growth. The company's revenue from H1 online channels in 23 years was 1.057 billion yuan (+ 68.98%), accounting for 24.37% of revenue, an increase in 3.56pct over the same period last year. Among them, B2C business income is 384 million yuan (+ 35.80%), O2O business is 359 million yuan (+ 139.80%), and proprietary platform business is 314 million yuan (+ 62.72%). Online business maintains a rapid growth trend.
Profit forecast: Jianzhijia continues to implement the "self-building + acquisition" two-wheel drive model, continues to promote the "based on Yunnan, deep ploughing southwest" strategy, while rapidly expanding the market outside the province. We estimate that the company's net profit for 2023-25 will be 4.23,5.27 and 662 million yuan, with a growth rate of 16.4%, 24.6% and 25.6% respectively. According to the valuation of the comparable company, the company will be given a 25-fold PE in 2023, with a target price of 82.00 yuan, covering it for the first time and giving it a "better than the market" rating.
Risk hint: the risk of tightening health insurance policy and the risk that store expansion falls short of expectations.