Ordinary people (603883): The flagship store ‘s performance is in line with expectations

Ordinary people (603883): The flagship store ‘s performance is in line with expectations
The event company released the third quarter of 2019 report. The company achieved operating income in the first three quarters of 2019. The net profit attributable to the parent and the net profit after deduction were 83.7 billion, 3.9.4 billion and 3.7.3 billion, an increase of 23 each year.59%, 21.44% and 20.62%, achieving the expected return1.38 yuan, on the one hand operating cash flow2.47 yuan, in line with our Air Force expectations. The performance of the brief evaluation maintained a rapid growth, and the expansion rate was in line with the expected Q3 single quarter, and the company achieved operating income of 28.36 ppm, an increase of 21 in ten years.48%, net profit attributable to mother 1.24 ppm, an increase of 20 in ten years.07%, deducting non-attributed net profit1.17 ppm, an increase of 22 in ten years.50%, the company’s performance continued to maintain a rapid growth of more than 20%, healthy operating conditions.The company’s Q3 single-quarter performance growth rate decreased slightly from the previous quarter, mainly due to a high base in the same period last year and a slight tightening of medical insurance policies in some regions. As of the end of the third quarter of 2019, the company had 4,808 stores, including 3,756 directly-operated stores and 1,052 franchised stores.In the first three quarters of 2019, the company added 536 directly-operated and merged stores, including 389 directly-operated stores and 147 merged stores. Due to the company’s development planning and business strategic adjustments, 69 stores were closed.We believe: 1) In the first three quarters, the company net increased 467 directly-operated stores and 477 franchised stores, and the store expansion progress was in line with expectations; 2) In September, it acquired 51% equity of Shanxi Huaqiang Parkway Pharmaceutical Chain Company, and its retail business involved storesMore than 80 homes are expected to be completed within the year. Flagship store floor efficiency rebounds, prescription outflows increase operating efficiency, and the company’s expansion has accelerated since 2018 (concentrated in small and medium stores and large stores). As new stores are still in the incubation period and M & A stores are gradually integrated, lowering the overall daily average flooreffect.As of the third quarter of 2019, the company’s flagship stores, large stores, small and medium-sized stores, and comprehensive daily average flooring efficiency were 135, 69, 39, and 50 yuan / square meter, respectively.The improvement of operating efficiency is related to the fact that the rest of 武汉夜网论坛 the store flooring and comprehensive flooring are slightly reduced due to expansion, which is basically normal. The increase in the proportion of prescription drugs affects the gross profit margin. The remaining financial indicators are basically normal. In the first three quarters of 2019, the company’s comprehensive gross profit margin was 33.89%, a decrease of 1 per year.The 67 singles were mainly due to the increase in the proportion of the company’s prescription drugs (including DTP business), the increase in the proportion of low-gross pharmaceutical business and the reform of small-scale taxpayers.Selling costs CO2 21.84%, a decrease of 1 unit before, and administrative expenses 4.51%, a decrease of 0 every year.One single, the overall effect of the company’s expansion while controlling costs is significant; accounts receivable increased slightly, basically stable; net cash flow from operating activities increased by 20.42%, mainly due to increased operating income.The remaining financial indicators are basically normal. Earnings forecast and investment rating We expect the company to achieve operating income of 118 in 2019-2021.1.5 billion, 147.05 ppm and 183.04 million, net profit attributable to mothers was 5.3.1 billion, 6.51 ppm and 7.950,000 yuan, an increase of 22 each year.1%, 22.6% and 22.2%, equivalent to 1, respectively.86 yuan / share, 2.28 yuan / share and 2.79 yuan / share, corresponding to PE of 36.3X, 29.6X and 24.2x, maintain BUY rating. Risk analysis Risk of policy changes in the industry; market competition intensifies; scale expansion progress fails to meet expectations; M & A store integration fails to meet expectations; goodwill impairment accruals;