Ordinary People (603883) Quarterly Comment: Steady Growth in the Third Quarter

Common People (603883) Quarterly Report Review: Steady Growth in the Third Quarter Store Expansion Continues to Advance
Revenue growth in the first three quarters of 201923.59%, with performance increasing by 21 each year.44% of the companies released the third quarter report, with revenue of 83 in the first three quarters.7 ppm, an increase of 23 in ten years.59%, net profit attributable to mothers3.94 ppm, an increase of 21 in ten years.44%, net profit after returning to the mother3.73 ppm, an increase of 20 in ten years.62%.Taken as a whole, the company’s third quarter performance has maintained steady growth.The third quarter revenue was 28.36 ppm, an increase of 21 in ten years.48%, net profit attributable to mothers1.2.4 billion, an annual increase of 20.07%.The company’s operating conditions are good, and the net cash flow from operating activities in the first three quarters was 7.07 billion, an annual increase of 20.42%.In September 2019, the company’s long-term equity transfer agreement acquired Shanxi Huaqiang Baihui Pharmaceutical Company and purchased a 51% stake in the target company after the reorganization. All regions made concerted efforts, the retail business maintained a steady growth in reported growth, and the company’s pharmaceutical retail revenue was 73.9.4 billion (+23.16%), accounting for 88 of total revenue.35%; medical wholesale income 9.04% (+ 32%), accounting for 10 of total revenue.8%; other income is 0.71 ppm, a decrease of 14 per year.19%.In terms of gross profit margin, the company’s pharmaceutical retail gross profit margin was 37.03% (-1.59%), wholesale medicine 9.15% (-0.46%), the gross profit margin of other industries is 22.20% (-6.74%). Due to the decline in gross profit margin at the end of retail sales, the company’s overall gross profit margin declined.89%, down by 1 every year.67%.In terms of products, the company’s sales of Chinese and Western medicines in the first three quarters were 65.2.5 billion (+27.44%), sales income of Chinese 上海夜网论坛 medicine6.6.6 billion (+16.57%), non-drug sales income9.3.7 billion yuan (+8.46%).Chinese and western patent medicines accounted for 77 as the company’s main sales varieties.96%, sales revenue continued to increase, and gross profit margin dropped slightly (-0.04pp).From a regional point of view, Central China achieved income 31.09 thousand yuan (+26.05%), with an income share of 37.15% is the company’s main source of business income; South China and Northwest China achieved revenue6.320,000 yuan (+20.18%), 13.2.6 billion (+11.81%) At the same time, North China and East China each achieved revenue9.5.9 billion (+22.57%), 23.4.4 billion (+29.39%), East China is the fastest growing region in terms of reporting mergers. The number of directly-operated stores increased to 3756, and the cost management and control ability gradually improved to the third quarter of 2019. The number of 合肥夜网 directly-operated stores of the company was 3756, the number of franchised stores was 1,052, and 536 new stores were added, including 389 directly-operated stores. Consolidated statementsThe scope of mergers and acquisitions of 147 stores, due to the company’s development planning and operational adjustments closed 69 stores.From the perspective of the distribution of stores, in the first three quarters, the company’s number of stores in East China increased by a maximum of 202, closing 32, and the number of stores at the end of the period reached 1,222; followed by 187 new stores in central China, closing 26, at the end of the periodThe number of stores is 1198. Central China, as the company’s “base camp”, has a prominent leading advantage.The report summarizes that the number of flagship stores, large stores, and small and medium-sized stores in the company are 97, 165, and 3494 respectively. The corresponding average daily efficiency is 135/69/39 yuan / square meter, and the comprehensive average efficiency is 50 yuan/ Square meter.The report totals the company’s selling expenses and expenses21.84% (-1.00%), the management expense ratio and financial expense ratio are 4 respectively.51% (-0.10%), 0.52% (-0.12%), and the ability to control expenses has been further improved. We are optimistic about the company’s long-term development and maintain a “buy” rating. The company’s drugstore chain has a broad layout. It is expected to continue to benefit from prescription outflows and industry consolidation in the future. It is estimated that net profit for 2019-2021 will be 5.41/6.66/8.24 ppm, maintain “Buy” rating. Risk warning: industry policy impact, lower drug prices leading to lower gross margins, mergers and acquisitions integration is less than expected, store opening speed is less than expected, goodwill impairment risk, etc.