Pien Tze Huang was slashed by investors

Visual China.

Text |Radar Finance, Author |Xiao Sa, edDeep.

In 2022, Pien Tze Huang will fall into a performance "Waterloo", with a single-digit net profit growth rate for the first time in 7 years. In May 2023, the company announced the largest price increase in history, and investors expect Pien Tze Huang to return to high growth.

However, the latest "report card" is not as good as most analysts' **, and the market generally ** company's annual net profit is more than 3 billion yuan. With the expectation of performance improvement disappointed, the company's stock price suffered a "performance-killing" style**.

In addition, it is pointed out that in the past few years, Pien Tze Huang's valuation has remained at a high level of more than 40 times PE, and the current performance growth rate may be difficult to continue to match the high valuation.

In recent years, traditional Chinese medicine companies have transformed into the field of big health, and Pien Tze Huang is no exception. However, the company's efforts to cultivate the "second curve" of performance growth, daily chemicals, health care products and other businesses are average, not only the cosmetics business with high hopes is stuck in revenue bottlenecks, but some of the products have repeatedly appeared on the "black list" of quality inspection.

On the evening of January 30, "Chinese Medicine Moutai" Pien Tze Huang disclosed its 2023 performance report.

According to the announcement, the company achieved a total operating income of 100 for the whole year3.5 billion yuan, a year-on-year increase of 1542%；Net profit attributable to shareholders of listed companies278.4 billion yuan, a year-on-year increase of 1259%；Unless recurring gains and losses are net profit of 284.5 billion yuan, a year-on-year increase of 1489%。

As for the increase in revenue, Pien Tze Huang said that it was due to the increase in sales revenue of the company and its holding subsidiaries due to the strengthening of market planning and the expansion of sales channels; The increase in profit was due to the increase in operating profit due to the increase in sales of the company's core products, Pien Tze Huang series products and Pien Tze Huang brand Angong Niuhuang Pill.

If you break it down, the company's net profit in the fourth quarter of last year was 37.5 billion yuan, down 10 percent year-on-year7%, while net profit in the first three quarters increased year-on-year.

In the announcement, the company did not explain the reason for the year-on-year decline in net profit in the fourth quarter. Radar Finance noticed that although Pien Tze Huang's revenue and net profit in 2022 will only grow by single digits, they will increase by 8% year-on-year respectively38% and 166%, but it is rare for the company's net profit to decline year-on-year in a single quarter, and it has only occurred in the third quarter of 2016 and 2022.

Therefore, as soon as this slightly weak result was released, Pien Tze Huang's stock price was quickly "voted with their feet" by investors. In the secondary market, on the morning of January 31, the company's stock price fell sharply at the open, hitting the day's limit price of 19755 yuan shares, a new low since August 2020.

Corresponding to the sharp drop in stock prices, Pien Tze Huang's actual net profit in 2023 will be lower than that of many brokerages.

On November 19 last year, Huaan** Tan Guochao's analyst team showed that the company's 2023 revenue was lowered to 103900 million yuan, a year-on-year increase of 195%；Net profit attributable to the parent company was lowered to 30700 million yuan, a year-on-year increase of 242%, corresponding to a valuation of 49x. The research report said that it is optimistic about the company's long-term development in the future and maintains the "best investment evaluation."

Tang Aijin, chief analyst of the pharmaceutical industry at Cinda**, also believes that considering the company's product strength and the scarcity of Pien Tze Huang, the company's "** rating" will be maintained, and the company's net profit attributable to the parent company in 2023 will be 305.8 billion yuan, a year-on-year increase of 237%。

In addition, according to the research report issued by Southwest **, Pien Tze Huang's net profit attributable to the parent company in 2023 will be 32500 million yuan, corresponding to 46 times PE; Wanlian *** company's net profit attributable to the parent company in 2023 will be 31$3.8 billion; Guohai *** Company's net profit attributable to the parent company in 2023 will be 33$1.3 billion; The net profit attributable to the parent company in 2023 will be 300.9 billion yuan (+25%).

On the whole, Pien Tze Huang will be 27 in 2023The net profit attributable to the parent company of 8.4 billion yuan is not yet the lowest value of the previous institution. Therefore, it is not difficult to understand that under the disappointment of expectations, the actual performance will be "killed" after it is released.

In addition, from a valuation perspective, Pien Tze Huang's performance growth seems to be difficult to match its high valuation. Wind data shows that since 2021, although the company's valuation has declined, it still maintains a high level of 45-50 times PE, even much higher than Kweichow Moutai.

After the disclosure of the performance report, some shareholders posted, "It is difficult for this performance growth rate to support the current performance, or the performance after a substantial price increase, and the time to test the faith has come." ”

Some investors bluntly said that the myth of performance growth has been broken, and "the valuation of 40 times P/E ratio is too high and has to be cut".

Looking back on the previous research report, many analysts gave Pien Tze Huang's performance an optimistic **, an important reason is Pien Tze Huang's price increase measures last year.

In May 2023, Pien Tze Huang announced that in view of the main raw materials and labor costs of Pien Tze Huang products, the retail price of Pien Tze Huang lozenges in the domestic market was raised from 590 yuan to 760 yuan, an increase of 288%；Overseas markets*** will be raised by about $35 accordingly.

According to the data, this is the first time Pien Tze Huang has announced a price adjustment after three years, and the increase of 170 yuan is also the largest price increase in history.

According to Pien Tze Huang's previous announcements, the last product** adjustment of Pien Tze Huang lozenges was retroactive to January 21, 2020. At that time, the company raised the domestic retail sales of Pien Tze Huang lozenges by 60 yuan, and the corresponding increase was about 40 yuan.

According to the statistics of the Southwest ** Research Report, from 2004 to 2020, the domestic retail price of Pien Tze Huang has been raised 9 times, from 325 yuan to 590 yuan, an increase of 81%.

At the same time, with reference to the past adjustments, the company's operating conditions generally show steady growth. For example, after raising prices in 2020, Pien Tze Huang will achieve 2320% year-over-year revenue growth and 45The year-on-year increase in net profit of 49% is outstanding.

But for now, the latest price increase seems to have failed to deliver the desired effect. On October 16 last year, after the company disclosed its third quarterly report, the stock price once "dived" sharply.

The reason is that investors found that "liver disease drugs", including the core product "Pien Tze Huang", are important products of Pien Tze Huang, but in the case of sharp price increases, the gross profit margin of liver disease drugs in the first three quarters decreased by 2 compared with the same period last year15 percentage points. Failure to implement this price increase may further lead to a decline in gross profit margin.

With the release of the annual report data, especially in the face of the decline in net profit in the fourth quarter, investment will inevitably put a question mark on the practice of driving performance growth through price increases.

It is worth noting that after the stock price fell to the limit, Pien Tze Huang urgently released the performance forecast for the first quarter of 2024 at noon on January 31.

The performance forecast shows that during the beginning of 2024, the company's product sales momentum is improving, the market is showing a strong sales trend, and it has successfully achieved a "good start". According to the company's preliminary accounting, it is expected that in the first quarter of 2024, the company can achieve a year-on-year increase in net profit attributable to shareholders of listed companies of no less than 25%.

Pien Tze Huang also reminded that the company's operating performance data in the first quarter of 2024 is based on market development in line with expectations, the stable development of the traditional Chinese medicine industry, and the stable international situation, and the actual situation in the future is highly uncertain.

However, the effect of such measures to "appease" investors is limited, and in the afternoon trading session, although the company's stock price has opened the fall limit many times, it still fell to 9 as of **16%, with a total market value of about 120 billion yuan, compared with the peak of nearly 300 billion yuan in 2021.

In order to break through the leading product of "Pien Tze Huang lozenges", which is highly dependent on performance, Pien Tze Huang has made great efforts to diversify very early.

As early as 2014, the company began to transform and formulated a big health development strategy of "one core and two wings": pharmaceutical manufacturing including Chinese patent medicines such as Pien Tze Huang as one core, cosmetics including toothpaste, daily chemicals, and health food and health products as two wings.

In the middle of 2021, the management put forward a new strategic blueprint of "multi-core driven, two-way development", in which "multi-core" is to make excellent Pien Tze Huang, make Pien Tze Huang brand Angong Niuhuang Pill, and strengthen Pien Tze Huang cosmetics.

It is reported that Pien Tze Huang cosmetics and daily chemical industry are respectively carried out by the holding subsidiaries Pien Tze Huang Cosmetics and Zhangzhou Pien Tze Huang Shanghai Jahwa Oral Care, the former has brands such as "Pien Tze Huang" and "Queen", covering skin care and washing products, and the latter products are positioned as the core of "clear fire", according to the needs of consumers for preventing and solving oral fire problems, oral care solutions are launched, and the products cover the categories of toothpaste and mouthwash.

Among them, in the case of a small volume of health food, the cosmetics business is an important direction for Pien Tze Huang's diversified transformation. In 2020, the company also planned to spin off the cosmetics company and list it separately.

But the embarrassing thing is that Pien Tze Huang cosmetics, which wants to make it bigger, has a revenue bottleneck. According to the financial report, in 2021, Pien Tze Huang's cosmetics business revenue will be 84.1 billion yuan, down 705%；In 2022, the company's cosmetics business revenue was 63.4 billion yuan, down 2461%；In the first three quarters of 2023, the company's cosmetics industry achieved revenue of 43.1 billion yuan, down 6 percent year-on-year53%。

In addition to the decline in revenue, Pien Tze Huang's toothpaste products were also named by the Food and Drug Administration due to the total number of colonies exceeding the standard. On January 4, the State Food and Drug Administration issued the "Notice on 43 Batches of Non-compliant Cosmetics", of which Pien Tze Huang toothpaste was on the list.

The product list shows that among the 15 batches of unqualified products with "total number of colonies", 1 batch of toothpaste products named "Pien Tze Huang Yamin Shu Toothpaste (Shurun Minmint)" produced by Zhangzhou Pien Tze Huang Shanghai Jahwa Oral Care *** and Suzhou Qingxin Health Technology *** has a total number of colonies of 66×10³cfu/g。

According to the "Safety and Technical Specifications for Cosmetics" (2015 Edition), the total number of colonies in eye cosmetics, lip cosmetics and children's cosmetics should be 500 (cfu g or cfu ml), and the total number of colonies in other cosmetics should be 1000 (cfu g or cfu ml).

The total number of colonies of Pien Tze Huang Yaminshu Toothpaste (Shurun Mint) that was sampled this time was more than 13 times the required amount.

According to ** public reports, previously in January 2023, Pien Tze Huang anti-allergy toothpaste was named twice within half a month, and the reason for the violation was that the total number of colonies did not meet the regulations.

In addition, in the past year, many senior executives of Pien Tze Huang have been dismissed, including former chairman Liu Jianshun, former vice chairman of Pien Tze Huang cosmetics Yang Puquan and former chairman Lin Jinsheng. The frequent changes in senior management and the notification by the regulatory authorities have undoubtedly made Pien Tze Huang's diversification strategy "worse".

For more exciting content, pay attention to titanium***id:taimeiti), or**titanium**app