Dashenlin (603233) M & A Incident Review: Mergers and Acquisitions Huaxing cut into the Hebei market.
Event: The company announced that it acquired a 46% stake in Baoshi Shengshi Huaxing (hereinafter referred to as the “subject”) with a transaction amount of 7424.
If the successful completion of the merger and acquisition will achieve the holding of the target (holding a total of 65% equity), the company will officially enter the Hebei market.
Opinions: Use high-quality mergers and acquisitions to cut into the Hebei market and continue to promote the “north” expansion. We believe that the target is a high-quality target for the following reasons: 1) Regional leading companies: The target is Baoding’s pharmaceutical retail market scale and brand influence.One, as of the end of 18, it has 39 stores, located in the urban area of Baoding and surrounding areas, and is second in size only to Chongde Pharmacy and Baobei Pharmaceutical Chain; 2) Large single store scale: the annual revenue of the single store in 17 yearsAs high as 6.12 million yuan (excluding tax), which is much higher than the industry’s average annual single-store revenue of 840,000 yuan, indicating that the target stores are mainly large stores in crowded areas such as hospitals and commercial centers, and the proportion of prescription drug sales is also large., In line with the advantages of future card prescription outflows (the annual revenue of the target 18 single-stores dropped to 4.09 million yuan, mainly because the number of new stores in 19 reached 19, a gradual increase of 95%, which significantly reduced the average single-store size); 3) Strong profitability: The 17-year net interest rate of the target company is 5.
8%, which is close to the listed pharmacy chains. Considering the large proportion of low-margin prescription drugs in large stores, the net margin level is already excellent (the target 18-year net margin has dropped to 1.
7% is mainly due to the early interruption of new stores in 18 years, not due to shifting business levels).
The company borrowed the high-quality target to cut into the Hebei market, and further opened up room for growth.
The target PS is estimated to drop to zero.
87x, indicating that the rational period of the M & A market may have arrived, considering that the target 18-year tax-included income has reached 1.
8.5 billion, valued at 1 based on the underlying 100% equity.
6.1 billion calculations, the target 18-year PS is 0.
87x, about 18 years in the M & A market1.
5x or even 2.
The estimated level of PS of 0x, this acquisition is estimated to have dropped significantly.
Our preliminary judgments are: 1) Fang Gaoji Medical, the largest pharmacy merger and acquisition capital in the primary market, has suspended the acquisition of chain pharmacies at the end of 18 and moved to the integration stage of the pharmacy.The 厦门夜网 reorganization of policies such as registration of pharmacists, strict investigation of pharmacy medical insurance and theft of pharmacy, the standardization of the pharmacy market has significantly accelerated, the pressure on small and medium-sized chain operations has increased sharply, and the sales and urgency are expected to have increased significantly.
We believe that this acquisition or heralds the expansion of the rationality period of the M & A market, further implementation of the standardization policy of portable pharmacies, and the future company or other listed chain pharmacies will tend to integrate rapidly under a reasonable merger and acquisition scale.
The main 19 years of the target’s main contribution to consolidated revenue, and the non-consolidated profit contribution is not the main focus. Considering that the target is only the third largest in the pharmacy market in Baoding, and currently there are no other national / provincial large-scale pharmacy chain leaders in Baoding.Share (such as Hebei Xinxing Pharmacy affiliated to Yifeng, Shenwei Pharmacy, Huajing Pharmacy Chain, etc.), we judge that the company’s next business focus in Baoding is to expand as soon as possible and replace the first market share in Baoding toIt is easy to cope with the competition of other large drugstore leaders, so we believe that the target 19 years will mainly contribute to consolidated revenue, but not contribute to consolidated profits.
Assuming 19 new target stores are still built in 19 years, it is estimated that the non-tax revenue in 19 years can increase by 30% to 2.
07 billion, if consolidated for half a year in 19 years, it is expected to contribute 19 years of revenue growth of about 1.
Mergers and acquisitions Huahuaxing cut into the Hebei market, the rationality period of the mergers and acquisitions market may have arrived. Considering the uncertainty of mergers and acquisitions delivery, we maintain the company 18?
The EPS for 20 years is 1.
82 yuan, the current price corresponds to 18?
20PE is 33/29/24 times.
This merger verifies our Air Force report’s judgment that the company has the potential to resist mergers and acquisitions. Considering that the company’s application for the issuance of convertible bonds has been approved by the Securities and Futures Commission on January 16, 19 (the scale is US $ 1 billion), we still maintain the company’s performanceThe judgment that the growth rate is expected to continue to accelerate, and the company will continue to accelerate the merger and acquisition integration with rational estimates in the subsequent continuous breakthrough opportunities.
Maintain “Buy” rating.
Risk Warning: The performance of M & A pharmacies is not up to expectations; the extension speed of new openings and M & A is not up to expectations.