Common People (603883) 2018 Annual Report & 19Q1 Quarterly Report Review: Balanced and Steady Development DTP Pharmacy Increases Rapidly
Event: The company announced the 2018 annual report, reporting a series of realized operating income94.710,000 yuan, an increase of 26 over the same period last year.26%; net profit attributable to mother 4.35 ppm, an increase from the same period last year.32%; net profit of non-attributed mothers4.1.6 billion, an increase of 20 over the same period last year.twenty two%.  The company announced in 2019 that it intends to distribute a 淡水桑拿网 cash dividend of 5 to all shareholders for every 10 shares.00 yuan (including tax).  The company announced the 2019 first quarter report, reporting a series of realized operating income.270,000 yuan, an increase of 23 over the same period last year.37%; net profit attributable to mother 1.5.9 billion, an increase of 22 over the same period last year.13%; net profit of non-attributed mothers1.460,000 yuan, an increase of 16 over the same period last year.01%.  The nationwide distribution is more balanced. The East China region is developing rapidly. The company is the only listed retail pharmacy that achieves the nationwide distribution. Until the end of 2018, the company’s marketing network covered 19 provincial markets across the country, nearly 90 prefecture-level cities, and the store network covered 65% of the Chinese populationAnd 南京桑拿网 78% of GDP.As of the first quarter of 2019, the company had a total of 3,466 stores, and its regional distribution was more balanced. The revenue share in central China declined slightly, and the share in eastern and northern China increased significantly.  To undertake prescription outflows from multiple angles, the number of DTP pharmacies has doubled. The company is gradually increasing the level of professional services in the report, and to undertake prescription outflows.Continue to promote professional services such as micro-medical consultation, customer APP, WeChat service number medication consultation, disease management, strengthen information construction, and use new retail and other technologies to win customer trust.The number of DTP pharmacies has doubled, from 36 to 80 in 2017, and the number of DTP varieties has increased from 150 to 343, achieving 5.19 ppm, an increase of 84 in ten years.04%.  The convertible bonds were successfully issued, and the funds were used to consolidate the scale of the company’s successful issuance of the logistics system.The 2 megabyte convertible bonds with a maturity of 6 years are mainly used for the construction of the Changsha Health Industrial Park, which is intended to build it into a leading pharmaceutical logistics distribution center in the country.The company has established an efficient logistics network layout that takes the region as the center to radiate to neighboring provinces and cities, and the provincial distribution center directly reaches stores. Now the company has deployed national and regional logistics centers such as Changsha, Hangzhou, Xi’an, Tianjin, 21 graded distribution centers, and warehouses.The area is over 150,000 square meters.The establishment of the new health park will help consolidate the company’s logistics system and escort for continued expansion.  Investment advice and profit forecast The company has a nationwide layout, has a strong logistics system and professional service capabilities, and has high store operation efficiency.It is estimated that the company’s operating income for 19-21 will be 117.20/145.26/180.4.6 billion, net profit attributable to mother 5.40/6.65/8.2.2 billion.The corresponding EPS is 1.89/2.32/2.87 yuan / share, corresponding to PE of 29/24/19 times, maintaining a target price of 66.15 yuan to maintain the “overweight” level.  Risks suggest that industry competition is intensifying, mergers and acquisitions have failed, and industry policies have changed.