Yunnan Baiyao (000538): New Baiyao whose performance exceeds expectations is worth looking forward to

Yunnan Baiyao (000538): “New Baiyao” whose performance exceeds expectations is worth looking forward to

1H2019 results are lower than our expected 1H2019 results announced by the company: Considering the absorption and completion, the caliber of the same period last year has been adjusted, and the 1H2019 company’s revenue is 138.

9.7 billion, a comparable caliber increase in the next decade.

72%; net profit attributable to mother 22.

470,000 yuan, a comparable caliber increase in the next ten years.

59%; deduct non-net profit 11.

US $ 3.5 billion, 25 intervals between comparable calibers.


Corresponds to profit 2.

16 yuan, the performance was lower than our expectations, mainly due to the improvement in industrial sector revenue.

Development trend The industrial sector performed poorly, with the commercial sector growing by over 10%.

1H2019 company industrial revenue 49.

09 million yuan, down 3.

At 16%, we expect the number of pharmaceutical divisions to be broken down, the number of health products divisions to increase, the Chinese medicine resources division to improve; business income 89.

5 billion yuan, an increase of 12.

86%, benefiting from the advancement of the two-vote system; other income was 4.98 million yuan.

The management expense ratio increased, and the operating net cash flow replaced over 100%.

1H2019, the company’s comprehensive gross profit margin was 29.

04%, comparable caliber fell 2 in the second half of the year.

13ppt, mainly due to the low gross margin of the commercial sector, the growth rate of the ultra-industrial sector.

Selling expense ratio 13.

95%, down by 0 under comparable caliber.

56ppt; management expense ratio 2.

27%, which improves by 0 under the caliber.

92ppt, which is mainly employee compensation, the increase in the service fee of intermediary agencies has increased, and at the same time increase distribution costs, delivery fees, etc.

Operating net cash flow -4.

5.1 billion, a reduction of 111 under comparable caliber.

86%, mainly due to poor performance of sales receivables, comparable accounts receivable increased by 6 in the caliber.


Global perspective, “new white medicine, new expectations”.

After the completion of the mixed reform, the company has recently decided on a new board of directors. Mr. Wang Minghui will continue to serve as the chairman of the company and Mr. Chen Fashu will be the co-chairmanship. The senior management team will remain stable, of which the CEO will be selected and hired globally to promote the internationalization process.

In the future, excluding the expectation of extension, we believe that the company’s three industrial divisions continue to highlight: the pharmaceutical division actively supplements product lines in orthopedics, gynecology and other fields, and the health products division is expected to open up new growth points in the market of washing and skin care;The Traditional Chinese Medicine Resources Division actively builds “Baiyao Life +” series products led by Leopard Seven.

Earnings Forecast and Estimates Considering that the company’s pharmaceutical sector 深圳丝袜会所 is still adjusting channels and absorbing and changing its share capital, we lowered our 2019 earnings forecast by 23% to 2.

83 yuan, first date 2020 profit forecast3.

15 yuan, down 10 each year.

8% and an increase of 11.

2% (compared to increase by 6 under the caliber.

0% / 11.

2%).The company currently expects to correspond to 27/24 times P / E in 2019/2020.

We maintain our Outperform rating and, considering changes in equity, lower our target price by 16% to 88 yuan, corresponding to 31/28 times P / E in 2019/2020, which is 15 compared to the current sustainable.

02% upside.

Risk increase affects sales volume; new product promotion effect exceeds expectations; extension expansion progress is lower than expected.