Dashenlin (603233): Performance maintains rapid growth and scale advantage is further enhanced
Event: On April 23, the company released its 2018 annual report: 18 roughly realized revenue of 88.
5.9 billion, an increase of 19 years.
38%; net profit 四川耍耍网 attributable to mother 5.
3.2 billion, an increase of 11 in ten years.
93%; deduct non-net profit 5.
09 billion, an annual increase of 7.
59%; net operating cash flow 8.
7.4 billion, an increase of 34 in ten years.
33 yuan / share.
The company’s 18-year overall performance growth is in line with market expectations.
Performance has maintained rapid growth. Accelerating the opening of stores has affected the growth rate of profits in phases. In terms of quarters, the company’s revenue and profits have maintained rapid growth, with revenues of 20 in each of the four quarters.
34 billion (+17.
4.9 billion (+16.
16 billion (+23.
60 billion (+20.
67%); net profit attributable to mother 1.
4.7 billion (+25.
4.1 billion (+7.
2.6 billion (+6.
18 billion (+8.
67%); deduct non-net profit1.
3.9 billion (+16.
3.9 billion (+5.
25 billion (+4.
0.6 billion (+3.
71%).Revenue growth has stabilized at about 20%, and the second half is faster than the first half, mainly due to the concentration of store acquisitions in the second half of the year; the net profit growth attributable to mothers has been extended in the third quarter, mainly due to the acceleration of new stores and increased costs; non-netThe profit growth rate has improved in Q4. In addition to the increase in amortization of new stores, it is also related to the increase in government subsidies in the fourth quarter, without a corresponding increase and replacement, and the increase in stage 4 expenses.
In terms of gross profit margin, the gross profit margin of the main business in 18 years was 40.
08%, an increase of 1 from 17 years.
20 averages, of which retail business gross margin is 40.
37pct), four major products (Chinese and western medicines, ginseng tonic, Chinese medicine decoctions, non-drugs) increased gross profit margins, the results are: 1) the expansion of stores in each region expanded, management costs were further allocated, the brand and scale effect appeared simultaneouslyThe company’s bargaining power in terms of commodity procurement and sales cooperation has been greatly improved, and the company’s profitability has been accelerated.
2) The company strengthens in-depth cooperation with some brand manufacturers, and obtains more cooperation resources from suppliers through the continuous increase in sales scale; through scientific adjustment of the structure of large health categories, the overall gross profit margin increases.
South China has sunk to the county and township levels, and its inter-provincial operating capacity has gradually increased. At the end of 18, the number of company stores has reached 3880 (changing direct sales), and a total of 967 new stores have been added, of which 707 have been added in South China and 619 have been built by themselves, Acquired 88, closed 42 stores; added 123 in East China, built 13 by itself, acquired 110, closed 7 stores; added 137 in Central China, built 69, acquired 68, and closed 23, Covering Guangdong, Guangxi, Henan, Jiangxi, Fujian, Zhejiang and other regions.
It can grind the company in the predominant areas (Guangdong, Guangxi), mainly self-built, re-integrate the brand and scale advantages to quickly occupy the market, and has gradually covered most of the counties and towns in both provinces.
In other regions, mergers and acquisitions + self-construction have taken a two-pronged approach. Guangxi, Henan, and Fujian have made major breakthroughs in the regional performance of major developments. Guangxi added 243 stores and increased operating income.
41%; Henan has 137 new stores, and its operating income increases by 36 each year.
98%-The company’s ability to expand across provinces has gradually increased, and regional barriers to competition have continued to rise.
From the perspective of the retail subsidiary’s 18-year net profit margin, Foshan Dashenlin 6.
92%, Shunde Dashen Lin 12.
86%, Qingyuan Dashen Forest 7.
84%, Maoming Dashen Forest 9.
17%, Zhanjiang Great Ginseng Forest 10.
51%, stable profitability after acquiring stores, consolidating regional leading advantages.
In 2019, the company has begun to develop franchise stores. Until now, 13 franchise stores have been completely opened. Through unified brand identification, transportation management management, personnel training, commodity prices, pharmaceutical service management and other substitutions, it has strengthened quality risk management and store compliance management., Will further increase the company’s scale and brand influence.
Actively undertake the outflow of prescriptions and bring performance flexibility in DTP. The company has completed the establishment of close cooperation with 30 manufacturers. In terms of chronic disease management, the company implements customer file management through the chronic disease management special team to create professional chronic disease service stores and improvePharmacy service capabilities; in terms of the construction of prescription platforms, the company has now completed the access to the incremental prescription sharing platform in Guangxi, Guangdong, and Henan provinces, which has brought great increase to the development of enterprises.
At the same time, the successful bidding of “4 + 7” cities has a limited impact on the company. The company will reduce stock relocations by returning warehouses and adjusting stocks, reducing prices and pushing down in affected areas, merging the same name and different factories with the same name.Increasing varieties, etc., further reduce the impact.
Profit forecast: As the company’s market share in South China continues to increase, the newly opened stores will gradually enter a profit period. It is estimated that the net profit for 2019-2021 will be 6 respectively.
2.6 billion, corresponding to PE is 29, 24, 20 times.
Covered for the first time and given a “Buy” rating.
Risk warning: Store performance after mergers and acquisitions is less than expected.