Yifeng Pharmacy (603939) Semi-annual Report of 2019 Comment: Company Performance Exceeds Expectations, M & A Integration Outstanding

Yifeng Pharmacy (603939) Semi-annual Report of 2019 Comment: Company Performance Exceeds Expectations, M & A Integration Outstanding
Incident Description The company released the semi-annual report for 19 years, and the company achieved revenue of 50 in the first half of 19 years.4.8 billion, an increase of 68 in ten years.65%, net profit attributable to mother 3.08 billion, an increase of 36 in ten years.78%, net profit after returning to mother 3.3.0 billion, an annual increase of 46.69%.The company’s performance continued to grow rapidly. Incident review The company’s profitability has declined, and its operating cash flow has increased significantly several times.The company achieved operating income of 25 in the second quarter of 19.7.9 billion, an increase of 70 in ten years.68%, net profit attributable to mother 1.6.1 billion, an increase of 29 in ten years.84%, the company’s performance in the second quarter maintained high growth.During the reporting period, the company achieved a gross profit margin of 39.09%, down by 1 each year.49pct, net interest rate 6.76%, down by 1 each year.02pct, of which the sales expense rate is 24.88%, down by 1 every year.84pct, overhead cost rate 4.20%, rising by 0 every year.39pct, financial expense ratio is 0.69%, rising by 0 every year.55 points.The company achieved net cash flow from operating activities in the first half of the year4.3.3 billion, a year-on-year increase of 146.09%.The decline in the company’s profitability is mainly due to the increase in costs and expenses during the expansion of the company’s stores, which will cause some pressure on the company’s profitability in the short term. In the future, the integration of conversion stores will be completed, and these new stores will gradually release their performance. The company’s self-construction + mergers and acquisitions went hand in hand, and the emerging pharmacy contributed significantly to the company’s performance.The total number of reported companies increased by 516, of which 368 were newly opened (including 87 new franchise stores), 204 were acquired, and 56 were closed. As of the end of the reporting period, the total number of company stores was 4,127 (including 256 franchise stores).Since Xinxing Pharmacy was consolidated in September 18, it contributed significantly to the company’s overall performance in the first half of this year. In the first half of 19, Xinxing Pharmacy achieved revenue5.7.7 billion, with a net profit of 4670.06,000 yuan, 55% of the annual performance commitments have been completed.The company announced that it intends to issue ultra short-term financing and convertible bonds, and the total amount of funds raised will not exceed 25.8.1 billion, the raised funds will help the company continue to expand the market size and optimize the company’s debt structure. The investment proposal estimates that the company’s EPS for 天津夜网 the years 19-21 will be 1.50\2.05\2.82, corresponding to the company’s closing price of 74 on August 19.30 yuan, PE for 19-21 is 49.53\36.24\26.35. Maintain the “overweight” rating. Risks indicate that the outflow of prescriptions exceeds expectations; the profitability of new stores is lower than expected.