Yixintang (002727) Annual Report Tracking: Active Expansion of Pharmacy Leaders Has Great Growth Potential
Core points: 1.
Event: The company achieved revenue of 91 in 2018.
76 ppm, an 18-year increase.
39%; net profit attributable to shareholders of listed companies5.
21 ppm, an increase of 23 in ten years.
27%; net profit attributable to non-attributed mothers5.
08 million yuan, an increase of 30 in ten years.
Implement EPS 0.
Among them, in the fourth quarter of 2018, the company achieved revenue of 25.
570,000 yuan, an increase of 19 in ten years.
01%; net profit attributable to mother 1.
3.0 billion, down 3 each year.
94%; realized non-returned net profit of 0.
930,000 yuan, an increase of 16 in ten years.
01%, achieving EPS 0.
The company achieved net operating cash flow in 20186.
3.6 billion, an increase of 62 in ten years.
54%, mainly due to the company’s collection of medical insurance premiums in the current period, and the shortening of the medical insurance payment period.
During the reporting period, the company made provision for impairment of goodwill in 1906.
660,000 yuan, all from the United States Ruifu Import and Export Trade Co., Ltd. and the United States Ruifuxiang Economic and Trade Co., Ltd.
Our Analysis and Judgment (I) The rapid expansion of stores, the profit of new stores is expected to further release the company’s 18-year store expansion “slow and then fast”, and overall rapid expansion.
As of the end of the reporting period, the company had 5,758 stores, of which 953 were newly opened, and 261 were relocated or closed, which was 692 more than the end of last year.
The company optimized and adjusted stores in the first half of the year, expanding store expansion, but replacing the company ‘s store expansion and speeding up in the second half of the year, the company ‘s scale of stores still maintained rapid growth.
The company ‘s store expansion accelerated in the second half of the year, including a net increase of 207 stores in the third quarter and a net increase of 281 stores in the fourth quarter.
The company plans to build 1,200 new stores in 2019.
As of January 31, 2019, the company had 5,872 stores, with a net increase of 114 stores during the month, which maintained rapid growth.
The new store is still in the running-in period, and future profits will increase further and be released.
In the fourth quarter, the company’s net profit after deducting non-attributions increased only annually.
01%, less than revenue 19.
01% growth per second.
Due to the company’s rapid expansion of stores in the second half of the year, most of the new stores are still in the running-in period, which will affect profitability in the short term.
In addition, the company’s new store expansion is concentrated in the second half of the year, and the performance of the company from the opening date to the report termination date has changed. The potential profitability has not been fully reflected.
As the new store enters the mature stage, we expect the company’s performance to be gradually released, and the performance boost effect brought by store expansion will be more significant.
We believe that the current concentration of domestic retail pharmacies has decreased and is still in the stage of leading horse races. The company will continue to expand rapidly in the future. The risk of goodwill impairment is manageable.
As of the end of the reporting period, the ending balance of goodwill in the company’s consolidated financial statements was 10.
77 ppm, accounting for 14 of the assets of the consolidated financial statements.
During the reporting period, the company made provision for impairment of goodwill in 1906.
660,000 yuan, all from import and export companies in the United States.
From the perspective of the retail pharmacy business model, goodwill is scattered among many stores, and the probability of large-scale impairments at the same time for each store is small.
Generally speaking, the company’s risk of impairment of goodwill on a one-time scale is controllable.
Thanks to the adjustment of stores in the first half of the year, the company’s ability to control expenses improved.
As the company slowed down its expansion in the first half of the year, the company’s store expansion in 2018 was higher than in previous years.
Benefiting from the company’s adjustment of stores in the first half of the year, the company’s expenses were well controlled in 2018, and both the management expense ratio and the sales expense ratio dropped significantly.
However, due to the decline in gross profit margin, the net profit margin only increased slightly.
Of which the management expense ratio is 4.
35%, a decrease of 0 compared with the same period last year.
23pp; sales expense ratio 26.
75%, a decrease from the same period last year.
08pp; gross margin 40.
53%, a decrease of 0 from the same period last year.
99pp; net interest rate 5.
66%, an increase of 0 over the same period last year.
The enhancement of the company’s cost control ability was mainly due to the company’s expansion in the first half of the year.
The company’s gross profit margin decreased slightly, mainly due to the decrease in the gross profit margin of incremental varieties represented by prescription drugs and DTP varieties.
(2) Multi-regional blossoming across the country, three-dimensional layout of county and township stores with great potential The company has strengthened the multi-regional layout of the country, and “high density in a small number of areas” exerts its scale advantage.
The company’s key development areas are in the Southwest and South China, while taking into account the store development in North China. At present, the primary area for the company to strengthen its layout is Sichuan and Chongqing.
The company’s strategy takes into account the national multi-region, and at the same time adheres to the high-density layout of stores in core areas, gradually forming an urban-rural integrated store layout structure.
As of the end of the reporting period, the company has more than 3,000 stores in Yunnan, more than 500 in Sichuan and Guangxi, more than 100 in Shanxi, Guizhou, and Hainan, and nearly 200 in Chongqing.
The company has initially formed Sichuan, Chongqing, Guiqiong and other key areas for promotion beyond Yunnan, and the company will expand in the above areas in the future.
Retail pharmacies have obvious geographical characteristics, and the company’s high-density layout of stores in advantageous areas can firmly maintain its scale advantage.
At present, the overall concentration of the pharmaceutical retail market will continue, and the overall market integration space is expected to continue.
As the leader of retail pharmacy, the company’s scale advantage and business experience will continue to help the company expand from the southwest to the whole country, with huge future development space.
The three-dimensional store layout takes into account the category market, and the potential of the grassroots market in towns, counties and cities is huge.
According to the number of reports, the company has more than 1,000 market stores in four types: provincial, prefecture-level, county-level, and township, forming an industry-specific urban-county-country integrated development pattern.
Provincial capitals and prefecture-level stores form a central radiation from the dimensions of brand, goods, services, and logistics, which play a guiding role in the consumption of the county market population, and are more conducive to the establishment of competitive barriers and cost advantages at all levels of the market.
With the “sinking of channels” for medical and health consumption and a new wave of urbanization, the rural population will expand to focus on third- and fourth-tier cities and county markets, with huge market potential.
At the same time, because the company’s supply chain management of commodity procurement, distribution, variety structure and other advantages over small and medium-sized chain, so the county, township level regional competitiveness is stronger, there is no need to replace more marketing resources and more aggressive pricescompetition.
Although the county and township-level stores have gradually exceeded the company’s average level, due to the low cost of rent and labor costs, the county and township-level stores have gradually exceeded the company’s average level, which has strengthened the company’s profitability.
Standardized store operation system ensures chain replication capability.
The company adheres to the development strategy of “highly standardized and unified management”, which must enable the company to have faster and larger-scale sustainable development capabilities.
After years of standardization construction, the company has established a total of more than 890 management systems, more than 3750 work processes, and more than 23,900 work standard management systems. Relevant management documents total more than 20 million words, and 44 work manuals are used by core employees.
From pre-market investigation, market planning to site selection, approval, decoration, store shelf layout, product structure design to new employee training, marketing, store operation management, etc., all have formulated integrated standardized processes, strict operating procedures and management control standards, To ensure the rapid replication and unified management of the new store.
Standardized operators are still conducive to building brand advantages, forming a brand image in the heart of consumers, and enhancing customer stickiness.
(3) Improve the refined management system and actively develop special pharmacy services.
Refined management to meet customer needs, and gradually establish full tracking is conducive to undertake new services.
The company’s dating CRM customer relationship management system, relying on the experience of 5000 long-term stores and serving 18 million members, customizes “big health” service plans and health solutions for customers with accurate perspectives and scientific methods to achieve the entire customer-oriented processDouble closed loop refined management.
According to the multi-dimensional segmentation of customers, the company provides a full range of services to different customer groups in different ways to improve customer loyalty.
After 2015, Yixintang promoted a customer medication quality transformation system. Through the CRM system, all sales drugs were established with customers, so that more than 75% of drug sales could be transformed into specific customers.
The company’s information traceability system can not only provide customers with safety guarantees for medication, but also help the company to undertake new pharmacy services such as “prescription drug outflow” and DTP pharmacy.
Benefiting from the “outflow of prescription drugs”, the company’s medical insurance stores performed well.
With the outflow of prescriptions and the promotion of DTP varieties, the average revenue growth of provincial and prefecture 成都桑拿网 medical insurance stores is faster than the average income growth of these two levels of regional stores.
The revenue of the company’s medical insurance stores is 20 higher than the average store revenue.
The company currently has 341 stores for special chronic medical insurance. The average single-store revenue of these stores is 51 higher than the company’s average.
93%, which is 25% higher than the average income of the company’s medical insurance stores.
The company sells 103 DTP products with a sales ratio of 0.
82%, pass the machine gross profit 8.
63%. Although the gross profit margin of these varieties has increased, these varieties are incremental, which can directly increase profits.
At the same time, because the customer stickiness of this part of the product is stronger, the increase in sales will also bring stable passenger flow.
With the outflow of prescriptions, the introduction of DTP varieties, the expansion of pharmacy channels with a variety of procurement types, the opening of payment for accounts for chronic diseases, the future receipt growth of the company’s stores ushered in new growth points.
Investment suggestions The company’s growth is in line with expectations, and we are optimistic about the company’s future development prospects.
First of all, we are optimistic about the prospect of the company’s rapid expansion.
The company’s store keeps expanding rapidly, and the new store opening target set for 2019 is still considerable. We are optimistic about the company’s store expansion capability and the potential for new stores to gradually mature and release profits.
Gradually, we are optimistic about the operating advantages of the company’s three-dimensional store layout.
As a leading retail drug store in the southwest, the company maintains a high-density store layout and maintains competitive barriers in the predominant regions. The company’s unique three-dimensional store layout penetrates the county and township grassroots markets. It has significant competitive advantages at the county and township level and has great potential.
Finally, we are optimistic about the company’s ability to refine management and the potential to develop new pharmacy services.
The company’s refined management meets the needs of customers, and the company’s information conversion system is conducive to the company’s commitment to the outflow of prescription drugs and the development of DTP pharmacy services.
We are optimistic about the rapid growth of the company’s future profits and predict that the net profit attributable to mothers will be 6 in 2019-2021.
39 trillion, corresponding to EPS 1.
65 yuan, corresponding to PE is 20.
Maintain the “Recommended” level.
4.Risks suggest that the company’s store layout is less than expected, the risk of drug quality problems, and the risk of intensified market competition.