Debang ** shares *** Liu Chuang, Chen Tielin recently conducted research on heavy pharmaceutical holdings and released a research report "Central and Western Pharmaceutical Circulation Leader, "14th Five-Year Plan" 100 billion target can be expected", this report gives a ** rating to heavy pharmaceutical holdings, the current stock price is 503 yuan.
Heavy Pharmaceutical Holdings (000950).
Investment Essentials. Investment logic: 1) A new round of state-owned enterprise reform is coming, which is expected to help improve the operation of state-owned enterprises and reshape their valuations. 2) In recent years, the revenue target has been exceeded, and the target income of 100 billion yuan in the "14th Five-Year Plan" is expected. 3) The company's net profit margin has a lot of room for improvement, and with the optimization of business structure and cost control, the net profit margin is expected to gradually increase. 4) The scale of medical device revenue continues to expand, and DTP pharmacies are expected to help the retail sector overtake in the "14th Five-Year Plan".
A new round of SOE reform is coming, which is expected to help SOEs improve their operations and reshape their valuations. 1) The three-year action of state-owned enterprise reform in 20-22 has been successfully concluded, and the effect is outstanding: in 2021, the operating income and total profit of state-owned enterprises nationwide increased respectively compared with 2020. 3%, with outstanding business improvement effect; 2) The valuation of state-owned enterprises in the pharmaceutical industry has a large upward space, and the market value is at a relatively bottom: as of March 3, 23, the valuation of private enterprises is 263 times, the valuation of state-owned enterprises is 229 times, the valuation of state-owned enterprises still has a lot of room to rise. As of the end of 22, the market value of state-owned enterprises accounted for only 182%；3) In 2023, a new round of SOE reform will kick off: replacing the net profit indicator with the return on net assets and the operating cash ratio with the operating income profit margin, guiding enterprises to pay more attention to input-output efficiency and cash flow from operating activities.
In recent years, the revenue target has been exceeded, and the target income of 100 billion yuan in the "14th Five-Year Plan" can be expected. 1) Exceeding the revenue target, the 14th Five-Year Plan target is just around the corner: the company's expected revenue in 2019 is 28.5-29 billion yuan (actual 33.8 billion yuan, annual expected revenue is 400-44.5 billion yuan (actual 45.2 billion yuan, annual expected revenue is 58 billion yuan (actual 62.5 billion yuan, annual expected revenue is 630-67 billion yuan (actual 67.8 billion yuan); In 2023, the company's budget revenue will be 740-80 billion, and according to the 14th Five-Year Plan, the company will achieve the revenue target of 100 billion, and the company's revenue and profit CAGR are expected to be 2022-2025 respectively. 3%, the company's profitability is expected to improve.
The company's net profit margin has a lot of room for improvement, and with the optimization of business structure and cost control, the net profit margin is expected to gradually increase: 1) The company's gross profit margin is leading in the same industry, and there is a lot of room for improvement in net profit margin: The gross profit margin of Heavy Pharmaceutical Holdings in 2022 is 86%, and the company's net profit margin from 2020 to 2022 is divided into 25%/2.1%/1.7%, and the net profit margin after deducting the profit contribution of Chongqing Yaoyou was 18%/1.6%/1.3%, which is 1% lower than the average of the same industry, mainly due to the company's higher financial expense ratio in the industry. 2) Optimization of business structure and cost control to help increase net profit margin: With the gradual control of expenses and the expansion of the proportion of high-margin business, the net profit margin is expected to gradually increase.
The scale of medical device revenue continues to expand, and DTP pharmacies are expected to help the retail sector overtake in the "14th Five-Year Plan". The revenue scale of the medical device business continued to expand, achieving revenue of 95 in 2022100 million yuan, accounting for 140%；The volume of medical devices continued to grow, and the revenue structure continued to be optimized. As of the end of 2022, there were about 800 retail stores, including nearly 110 DTP pharmacies, of which DTP prescription pharmacy sales increased by 28% year-on-year7%。In 2022, the gross profit margin of medical devices will be 122%, and the gross profit margin of pharmaceutical retail was 221%, which is higher than the gross profit margin of drugs by 77%, we expect the proportion of the company's high-margin business to continue to increase, and profitability to improve steadily.
Investment suggestion: Heavy Pharmaceutical Holdings has grown from a circulation enterprise in Chongqing to a leading circulation enterprise in the country, with strong growth, the company's history has exceeded the performance indicators, the 14th Five-Year Plan: 100 billion revenue is just around the corner, and in the context of a new round of state-owned enterprise reform, with the company's cost control + business structure optimization, profitability is expected to continue to improve, we expect the company's net profit attributable to the parent company to reach 7 in 23-25 years1/10/11.600 million yuan, corresponding to PE were 11 77/6.7. For the first time, it is given a "** rating."
Risk warning: the risk of intensifying regional competition, volume procurement may affect the growth rate of the industry, and the post-epidemic recovery is less than expected.
*According to the calculation of the research report data released in the past three years, the research team of Du Xiangyang in the southwest has conducted in-depth research on the stock, and the average accuracy of the past three years is 6503%, its **2023 attributable net profit is 600 million, and the **PE converted according to the current price is 1402。
The latest profit** breakdown is as follows:
A total of 1 institutions have rated the stock in the last 90 days,** 1 ratings.
The above content is compiled by **Star based on public information, generated by algorithms, and has nothing to do with the position of this site. **Star strives but does not guarantee the accuracy, completeness, validity, timeliness of all or part of the content of the information (including but not limited to text, **audio, data and charts), if there is any problem, please contact us. This article is a compilation of data and does not constitute any investment advice for you.