Kyushutong (600998): 2018 deducts non-net profit YOY + 22% in line with expectations and maintains buy rating
Summary and recommendations: Company performance: The company achieved revenue of 871 in 2018.
400 million, a year-on-year increase of +17.
8%, recorded a net profit of 13.
400 million, YOY-7.
3%, due to the company’s Hanyang plot of the old city transformation in the same period last year received compensation compensation5.
300 million US dollars, after excluding this influencing factor, the company’s actual net profit after deduction is YOY + 21.
6%, in line with expectations.
Among them, Q4 achieved revenue of 233 in a single quarter.
90,000 yuan, +20 compared with the same period last year.
0%, recorded a net profit of 5.
700 million, a year-on-year increase of +16.
0% (after deducting non-YOY + 19.
In the “two-vote system”, the company’s revenue and net profit growth after deductions are still in the forefront of the industry.
The company’s dividend plan is to pay 1 yuan (including tax) for every 10 shares.
The sales structure has been continuously optimized to promote revenue growth: Although affected by the implementation of the “two-vote system” policy in 2018, the company actively adjusted its sales structure in accordance with the policy, and the revenue growth rate was faster than that of the industry (industry growth 6 in 2018).
In terms of channels: (1) The company’s medical institution channel realized sales income of 297.
300 million, a year-on-year increase of +33.
1%, of which hospital pure sales (second-level and above hospitals) realized sales income of 18.2 billion yuan, +24 year-on-year.
5%, mainly because the company seized the opportunity to continue to expand the secondary and higher-end hospital market; benefiting from the promotion of tiered diagnosis and treatment policies, the company’s primary medical institutions below the secondary level accelerated sales growth and achieved sales revenue of 115.
400 million, a year-on-year increase of +49.
6%; (2) Retail pharmacy wholesale business also benefited from the impact of the “business-to-business” policy. Regional intermediate channels decreased, and the company’s direct replacement increased, achieving revenue of 225.
700 million, a year-on-year increase of +33.
8%; (3) The distribution business was affected by the “two-vote system” and “business-to-business reform”, achieving 293.
30,000 yuan, YOY-1.
3%, but after the complete consolidation of the policy, the follow-up will be relatively stable; (4) The company’s good pharmacist retail business achieved revenue19.
600 million, a year-on-year increase of +4.
5%, of which physical pharmacies achieved revenue of 10.
400 million, +18.
5%, still maintaining a relatively better growth rate, due to the adjustment of business strategy, the decline 杭州桑拿 in online business was 14.
9%, dragging down the growth of the retail pharmacy business segment.
(5) Non-pharmaceutical channels maintained rapid growth and realized revenue 33.
700 million, a year-on-year increase of +14.
Both gross profit margin and expense ratio remain stable: the company’s comprehensive gross profit margin in 2018 was 8.
6% increase by 0 every year.
Two units, mainly direct sales and high gross profit business such as medical equipment, increased their proportion.
Selling expenses pricing 3.
2%, increasing by 0 every year.
15 single, management + R & D expenses 2.
3%, flat for one year; financial cost input 1.
0%, flat for one year.
Overall, the company’s period expenses were 6.
4%, increasing by 0 every year.
Excellent cash flow performance: In the third quarter of 2018, the company began to strengthen receivables management, effectively control the sales of hospitals and settle accounts, increase receivables collection efforts, and increase the proportion of downstream customers’ cash payment assessment to form customersThe increase in cash payments caused the company’s net cash flow from operating activities for the full year of 2018 from -10 in 2017.
1 million recovered to 12 at the end of 2018.
200 million, and deducted non-net profit (12.
300 million) matching, quality and quality of operations.
Profit forecast: We expect the company to achieve net profit in 2019/2020 respectively.
3 ppm / 20.
100 million, +21 each year.
9% / 23.
3%, EPS is 0.
87 yuan / 1.
07 yuan, corresponding to PE is 17 times / 14 times.
The company’s pure sales, primary distribution business and terminal direct distribution business are expected to maintain rapid development. It is currently estimated to be low, and maintain a “buy” investment rating.
Risk Warning: Pharmaceutical Policy Risks; Revenue Structure Changes Less Than Expected