Kyushutong (600998) Company In-depth Report: Adapting to Policy Trends and Improving Profit Structure

Kyushutong (600998) Company In-depth Report: Adapting to Policy Trends and Improving Profit Structure

Products are independent, channels are shared, and platform value is gradually realized. Kyushutong is the nation ‘s largest private pharmaceutical distribution company. It plans to build 31 provincial-level pharmaceutical logistics centers in provincial administrative regions across the country, establish 96 prefecture-level distribution logistics centers, and cover the entire country.The 95% regional sales network has obvious breadth and depth advantages.

The company integrates the group’s logistics resources, gives play to the value of its channel platform, and based on medicines, has successively cut into the fields of medical devices, Chinese medicinal materials and consumer goods to meet customers’ one-stop procurement needs, 上海夜网论坛 reduce procurement costs and increase procurement sales.

In terms of medicines, the company has long been cultivating the primary medical market and the retail terminal market. It has a strong competitive advantage and enjoys the two-ticket system, tiered diagnosis and treatment, prescription outflows and other policy and institutional dividends. The future stable growth is expected; in terms of equipment, the company covers OTC and medical institutionsVarious channels such as e-commerce, give full play to the advantages in the industrial supply chain, focus on creating a professional medical device service platform, and pay equal attention to endogenous and extension, and continue to expand coverage; in terms of Chinese medicinal materials, rely on the Group’s logistics resources to construct a closed-loop traceable system and ingenuityBuild a brand to meet the market’s demand for high-quality Chinese herbal medicine resources, which is expected to continue to exceed the industry’s growth level.

E-commerce + entities cut into the terminal market, and FBBC’s ecosystem flourished. Kyushu Actively actively deployed online and offline businesses, interacted closely, and cut into the terminal market.

The affiliated good pharmacist owns 1287 physical pharmacies (including franchise stores) in 14 provinces and cities, and cooperates with Buchang Pharmaceutical to deploy professional pharmacies and formulate prescription outflow docking platforms. Online integration of B2B, B2C, O2O and other resources to promote e-commerce business and formA platform with strong dependencies.

Aiming at individual pharmacies and private clinics, the company further expanded the new FBBC e-commerce business model of the entire industrial chain, creating a virtual chain headquarters of single pharmacies / private clinics, improving the marketing capabilities and coverage speed of manufacturers’ products in the small terminal market and assigning valueCan pharmacy terminal, provide remote medical platform and prescription reception, online and offline operations, strive for more and more stable consumer traffic for pharmacy merchants, meet the multi-party needs of “factory-store-customer”, online transaction amount, daily activeThe number of users continues to increase.

The company uses its own logistics service platform to undertake delivery services for all orders in the system, expand customer coverage, strengthen control over end customers, and promote the coordinated development of the company’s business.

Invest in control channels, expand new businesses, and improve profitability. Kyushu ‘s own distribution network is complete, and its upstream and downstream customer resources are abundant. The company actively cuts into the terminal market and uses FBBC buildings to enhance terminal coverage.Promote its transformation from distribution to sales, industry, and services.

The company has established a general agent division, which is responsible for the joint reorganization of national general agent products, sales management, after-sales service and marketing management of its own products. In 2018, it obtained more than 900 types of agents and achieved operating income29.

33 ppm, a 67-year increase.

12%, gross profit margin 23.

07%, significantly improving core competitiveness and gross profit level.

With the rapid development of new development businesses such as general agent division, industrial business, and third-party logistics business, the company’s overall profitability is expected to continue to improve.

Investment advice We predict that Kyushu Express’s operating income for 2019-2021 will be 1,000.

9.7 billion, 1164.

56 ppm and 1375.

1.2 billion, a ten-year growth rate of 14.

9%, 16.

3% and 18.

1%, net profit attributable to mother 16.

5.9 billion, 21.

17 ppm and 27.

6.7 billion, a previous growth rate of 23.

7%, 27.

6% and 30.

7%, corresponding to the closing price on the 11th, PE is 14 times, 11 times and 8 times respectively, the first coverage, given a “recommended” rating.

Risk reminders: risks from changes in industry policies; new business expansion is less than expected; accounts receivable management risks.