Guangyuyuan (600771): Continue to expand the quality of pharmacy terminal operations or usher in improvements

Guangyuyuan (600771): Continue to expand the quality of pharmacy terminal operations or usher in improvements

Event: In 2018, the company’s operating income and net profit after deduction were approximately 16.

200 million, 3.

800 million US dollars, the annual growth rate is about 38.

5%, 81成都桑拿网.

4%; operating income in the fourth quarter of 2018, net profit after deduction is approximately 6.

0 billion, 1.

500 million US dollars, the annual growth rate is about 38.

6%, 35.

7%.

Continue to expand pharmacy terminals, and the quality of operations may usher in improvement.

The company’s 2018 revenue was approximately 16.

2 trillion, the annual growth rate is about 38.

5%.

The income of traditional Chinese medicine is about 12.

80,000 yuan, an increase of about 34 in ten years.

8%; Fine Chinese medicine income is about 2.

10,000 yuan, an increase of about 52 in ten years.

9%; health wine income is about 0.

500 million, an increase of about 106% in ten years.

In terms of different products, the average turtle age set income is about 400 million, which increases by 4 every year.

3%; Ding Kun Dan Shui Mi Wan’s income is about 3.

9 trillion, a year-on-year increase of 39%; ordinary An Gong Niuhuang Wan income is about 2.

USD 600 million, a year-on-year growth rate of about 99%.

The rapid growth of the company’s revenue is initially to strengthen the development of terminal channels. At present, its products have covered nearly 150,000 (+ 50%) chain stores across the country, of which nearly 40,000 are management terminals (+ 33%).

Through continuous improvement of the market layout and the construction of the marketing system, and the promotion of channel sinking and coverage, the product market share and terminal sales rate have been continuously improved.

The company’s non-net profit during the period was approximately 3.

8% 10%, a year-on-year increase of about 81%, the specific analysis is as follows: 1) gross profit margin dropped 81%, year-on-year decline of about 1.
.

Three of them are mainly due to the increase in the proportion of business and changes in income structure; 2) The expense ratio during the period is about 49.

3%, a decline of about 7 a year.

6 units; of which management expenses are flat, sales expense growth rate is lower than revenue growth rate, and overall control is better.

In the fourth quarter of 2018, operating income and net profit after deduction were approximately 6.

0 billion, 1.

500 million US dollars, the annual growth rate is about 38.

6%, 35.

7%, the single quarter gross margin fell, related to supplementary depreciation.

Accounts receivable at the end of the period was approximately 13.

4 ‰, an annual increase of about 82%, related to the increase in the number of new terminals.
In the 2018 annual report, the company put forward its operating targets for 2019, namely “revenue 20 billion and profit 4”.
200 million “, lower performance growth expectations, or shift management focus to improve operating quality.

With the improvement of product bargaining power and the consolidation of the system, it is expected that accounts receivable and cash flow may improve in 2019.

The problem of sufficient production capacity was solved, and the product line was gradually enriched.

1) Solutions with sufficient capacity, product lines are gradually enriched.

The company has abundant reserve products, most of which are OTC varieties of medical insurance.

At present, the new plant has been put into use, and the rich product line is conducive to the company’s breakthrough in reducing revenue and consolidating its brand power in chain terminals.

At the same time, we expect that Dingkundan oral liquid will increase the market launch of Guilingjijiu, or bring new growth points; 2) Actively expand the sales network and synergistically build brands with products.

Continue to strengthen cooperation with leading national and regional leading commercial and top 100 chain drug stores. At present, the number of hospitals covered by the company increased to 4,791, OTC terminals increased to 150,000, and nearly 40,000 management terminals.

At the same time, the promotion of good pregnancy counters and other activities, the brand power has gradually increased.

Earnings forecast and rating: EPS is expected to be 1 in 2019-2021.

27 yuan, 1.

61 yuan, 2.

03 yuan (the original forecast was 1 for 2019-2020).

86 yuan, 2.

The reduction is due to the expected decline in product growth and an increase in the sales expense ratio at the same time. The corresponding price-earnings ratios are 26 times, 21 times, and 16 times.

We believe that the company’s promotion of products has gradually increased, the number of terminal channel layouts has grown rapidly, performance growth and quality have improved or exceeded expectations, and we maintain a “Buy” rating.

Risk Warning: Product sales may not meet expectations, and market expansion may not meet expectations.