Yifeng Pharmacy (603939) Company’s 2019 Third Quarterly Report Commentary: Performance Meets Expectations and Continues to Cultivate Regional Markets
Company dynamics The company issued a report for the third quarter of 2019 Comment on the matter Commentary Performance continued to grow rapidly The company achieved operating income 73 in the first three quarters of 2019.8.9 billion, an annual increase of 58.36%; net profit attributable to mothers4.1.8 billion, an annual growth of 35.48%; net profit deducted from non-attributed mothers4.1.2 billion, an annual increase of 42.75%.In terms of quarters, the company achieved operating income of 23 in Q3 2019.400,000 yuan, an increase of 39 in ten years.95%; net profit attributable to mothers1.100,000 yuan, an annual increase of 31.99%; net profit deducted from non-attributed mothers1.09 million yuan, an annual increase of 32.82%.The rapid growth of the company’s performance is mainly due to the simultaneous growth of the old store in the past ten years and the expansion of the store. The impact of the consolidation of emerging pharmacies on the growth rate of the company’s performance has gradually disappeared. The rapid expansion of stores continued until the end of September 2019. The company’s total number of stores reached 4,416 (including 335 franchised stores), an increase of 36.twenty one%.The company has a net addition of 805 stores in the first three quarters of 2019, including a net addition of 289 stores in 19Q3. It is expected that the company’s gradual net addition of stores in 2019 is expected to exceed 1,000.In the first three quarters of 2019, the company opened 579 new stores (including 166 new franchise stores), acquired 307 stores, and closed 81 stores. The number of new stores increased compared with the same period of the previous year, mainly due to the company’s increased self-builtAt the same time, the store has been promoting the franchise model, and the number of franchise stores has continued to grow rapidly.The company continues to deeply cultivate regional markets such as Central China, East China, and North China, maintaining fast store speeds, 杭州桑拿 increasing the release of sales after the end of the incubation period of stores, and through competitive management such as refined management and dense store layout, which is expected to drive the company in existing regional markets.Increased market share. Proposed application 6.Comprehensive credit granting of US $ 500 million to enhance financial strength The company disclosed in an announcement in October 2019 and plans to apply for 6.The comprehensive credit of 500 million US dollars meets the needs of business development, considering that the company issued no more than 15 convertible bonds.8.1 billion yuan, of which 6.The $ 800 million “new chain drug store project” is planned to build 1,500 new chain stores in Hunan, Shanghai, Jiangsu, Jiangxi, Hubei, Guangdong, and Hebei. The construction period is 3 years, which will help strengthen the company’s financial 天津夜网 strength and guaranteeThe company maintains a rapid store expansion rate, deepens the regional market store layout, and consolidates its competitive share in new regional markets such as North China. Risks suggest that the store expansion is less than expected; the risk of innovative business development such as pharmaceutical e-commerce is less than expected; the risk of intensified competition in the regional market leading to a decline in gross profit margin and net profit margin; increased store cultivation and less-than-expected risk of integration; goodwill impairment. Investment recommendation In the next six months, maintain a “cautious increase” rating and expect the company’s EPS to be 1 in 19 and 20 years.49, 1.98 yuan, with a closing price of 87 on October 29.At 68 yuan, the dynamic PE is 58.83 times and 44.21 times.We believe that the company implements the development strategy of “regional concentration and stable expansion”, and is expected to maintain a high-speed growth trend in 2019. It will replicate the competitive advantages of refined management and standardized operations to supplementary stores, and expand the proportion of designated medical insurance stores and outflow of prescriptionSuch policies are favorable, and it is expected to maintain a high level of gross profit margin while driving the company’s revenue to maintain rapid growth, and its growth is relatively clear.In the next six months, we will maintain a “cautious increase” rating.