Pien Tze Huang (600436) Company Research: Price increase expectations significantly accelerate growth of performance

Pien Tze Huang (600436) Company Research: Price increase expectations significantly accelerate growth of performance

Event: On the evening of January 20, 2020, the company issued an announcement. Considering the main raw materials and labor costs of Pien Tze Huang products, the company decided to introduce the company to introduce the product Pien Tze Huang Tablets. The domestic retail price will be reset at 530 yuan per capsule.The price is raised to 590 yuan / cap, and the supply price is increased by about 40 yuan / cap. The supply price in overseas markets is increased by about 5.

$ 80 per capsule.

The price increase is in line with the company’s development needs, and the price increase has slightly exceeded expectations.

After the price increase in May 2017, the company raised the price again after a lapse of two and a half years. The domestic terminal price increase was 11%.

3%, over 16 and 17 years price increase (8.

7% and 6%), slightly higher than our expectations; the company’s price increase is primarily due to the rapid increase in raw material and labor costs, one of the core raw materials of Pien Tze Huang, the market price of natural bezoar from 15-20 thousand yuan in 2017-2019/ Kg increased to 400,000 to 500,000 / kg, which caused some pressure on the cost of the product; according to the company’s main ingredient ratio of Pien Tze Huang (bezoar 5%, musk 3%, snake bile 7%, 37% 87%), only bezoarOne, the cost of a single tablet of Pien Tze Huang has increased by 30-40 yuan in the past three years; the company’s modest and timely price increase will help the company ensure the supply of pharmaceutical raw materials and the quality of medicines, and achieve long-term healthy development.

The price increase is expected to significantly increase the company’s 2020 performance.

Pien Tze Huang Pharmaceutical is the main source of the company’s profits and the core growth point. According to our calculations, in the first half of 2019, the profits contributed by Pien Tze Huang Pharmaceutical accounted for about 90% of the company’s net profit.

According to our model calculations, this price increase will increase the company’s thickness by 20202.

With a net profit of 100 million U.S. dollars, our 20-year performance growth rate is expected to increase from 23% to 38%, and the company is expected to achieve faster speed of performance conversion.

The increase in the contribution of price increases to performance growth will directly increase revenue, increase gross profit, substitution, and increase in channel profit margins may stimulate downstream dealers and terminals, 南京桑拿网 increase sales promotion efforts, and further expand the consumer base of Pianzai.

2020 expects the company’s development to accelerate again: We incorporated the recommendation logic of 2020 Pien Tze Huang in the weekly report of January 12, 2020, and repeated it in the annual performance newsletter review released on January 19: We believe that the amount of Pian Tsai Chan ‘s drugThe logic of rising prices has not changed. We expect the remaining internal price increase space for 3-5 years. We will see more than 4 billion in the middle of the sales scale. The daily cosmetics business has entered the harvest period. The overall growth rate in the next three years will be maintained at over 30%; The company’s marketing reform will continue to deepen and expand blank markets.

2020 is the year of the chairman’s re-election. 北京夜网 In the in-depth report released on July 28, 2019, we analyzed that the chairman meets the conditions for re-election, and the probability of retention is contradictory. If the chairman is re-elected successfully, it will dispel market doubts.

Profit forecast: Taking into account the price adjustment factors of Pien Tze Huang, the performance forecast is raised, and the company’s net profit attributable to the mother is expected to be 13 in 2019-2021.

7, 19.

0, 23.

5 trillion, corresponding to a growth rate of 20.

2%, 37.

9%, 24.

2%, the current expected PE is 55/40 / 32X. After the price increase, the company’s 2020 performance growth is expected to accelerate significantly. The current 40X is expected to significantly improve the room and maintain a “buy” rating.

Risk warning: The performance growth rate after price increase is lower than expected; the increase in raw material prices leads to a decline in the gross profit margin of the product; it may lead to operational changes due to changes