Events:
The company announced its three-quarter 2018 report that revenue in the first three quarters was 13.164 billion yuan, an increase of 28.78% over the same period last year. The net profit of returning to the mother was 260 million yuan, an increase of 29.86% over the same period last year. The net profit after deducting non-return was 256 million yuan, an increase of 24.51% over the same period last year. The company predicts that it will achieve a net profit of RMB 2.64-343 million in 2018, an increase of 0-30% over the same period last year. Overall performance is in line with expectations.
Main points of investment:
It grew rapidly in the third quarter, and the sales expenses of subsidiaries increased compared with the same period last year.
18Q3 achieved revenue of 4.644 billion yuan (+ 25.99%) and net profit of 75 million yuan (+ 29.94%). The growth was mainly contributed by subsidiaries, and the growth rate slowed slightly compared with Q2, but the gross profit margin of Q3 was 9.93% in the second quarter and significantly higher than that of 17Q3 (+ 1.71pct). It is expected that the impact of Sunshine recruitment weakened last year, and the company's drug distribution operation is on the right track. The expense rate increased slightly during Q3, mainly due to the increase in sales expenses of subsidiaries, which is expected to be caused by the expansion of local distribution business by equipment subsidiaries.
The growth rate of accounts receivable has slowed down and the age of accounts has been extended.
Bills and accounts receivable in the first three quarters was 6.091 billion yuan, a slight increase compared with 6.031 billion yuan in the first three quarters, and the overall growth rate of accounts receivable decreased significantly, mainly due to the steady progress of hospital payment; the impairment loss on Q3 assets was 15.0934 million yuan, mostly belonging to subsidiaries, mainly due to the extension of the age of some accounts receivable and the impairment loss on its provision. The operating cash flow of 18Q3 is-112 million yuan, and the hospital payment is expected to be concentrated in the fourth quarter and is expected to become a regular employee for the whole year.
Maintain recommended rating
After Sunshine recruitment in Beijing gradually got on the right track in 2017, the company's drug distribution business also returned to steady growth; consumables distribution business is still in the layout expansion stage, and the investment on the cost side has a slight impact on the company's profits in the short term, but the consumables distribution market is broad, and the company is expected to become one of the giants in the industry in the long run. To maintain the expected net profit of RMB 3.22max 4.01 / 497 million in 1919 / 20, corresponding to the current PE of 11.23Universe 7.27x, and maintain the "recommended" rating.
Maintain recommended rating
The expansion of drug distribution business in Beijing is not as expected, and the progress of M & An integration of equipment distribution business is not as expected.