SINOPHARM(CNCM LTD)(SH:600511) Xinda Securities·2024-04-27 23:30Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the benchmark index [7]. Core Insights - The company reported a steady growth in Q1 2024, achieving a revenue of 12.122 billion yuan, which represents an 8% year-over-year increase. The net profit attributable to shareholders was 459 million yuan, reflecting an 11% year-over-year growth [1][2]. - The net profit margin improved by 0.07 percentage points to 4.08%, primarily due to a decrease in expense ratios. The expense ratio for the period decreased by 0.63 percentage points to 2.37% [1]. - Investment income for Q1 2024 was 105 million yuan, a 30% increase year-over-year, accounting for 23% of the net profit attributable to shareholders [1]. Financial Performance Summary - The company’s total revenue for 2022 was 45.499 billion yuan, which increased to 49.696 billion yuan in 2023, with projections of 54.387 billion yuan for 2024, reflecting a growth rate of 9.4% [2]. - The net profit attributable to shareholders was 1.964 billion yuan in 2022, increasing to 2.146 billion yuan in 2023, with an expected rise to 2.361 billion yuan in 2024, indicating a growth rate of 10% [2]. - The gross profit margin was 8.4% in 2022, slightly decreasing to 8.0% in 2023, with expectations of a slight recovery to 8.1% in the following years [2]. Business Strategy and Market Position - The company is focusing on strengthening its core business during the "14th Five-Year Plan" period, with a strategy centered around "big marijuana drugs" to solidify its leading position in the market [1]. - The company has achieved 100% coverage of grade hospitals in the Beijing area and has established a strong presence in over 4,700 grassroots medical institutions [1]. - The company maintains a leading position in the distribution of narcotic drugs across more than 30 provinces and municipalities in China [1]. Earnings Forecast - The company is projected to achieve revenues of 54.387 billion yuan, 59.651 billion yuan, and 65.443 billion yuan for the years 2024, 2025, and 2026, respectively, with year-over-year growth rates of 9%, 10%, and 10% [1]. - The net profit attributable to shareholders is expected to be 2.361 billion yuan, 2.624 billion yuan, and 2.912 billion yuan for the same years, with growth rates of 10%, 11%, and 11% [1]. - The corresponding price-to-earnings (P/E) ratios are projected to be 11 times, 10 times, and 9 times for the years 2024, 2025, and 2026, respectively [1].