Tongce Medical (600763): The large-scale effect of the continuous and high-growth branch’s maturity appears

Tongce Medical (600763): The large-scale effect of the continuous and high-growth branch’s maturity appears
On April 25, 2019, Tongce Medical announced the first quarter of 2019 report, and the company realized revenue3.0.94 million yuan, an increase of 27 in ten years.77%; net profit attributable to mothers reached 94.71 million yuan, a year-on-year increase of 53.71%; net profit of RMB 92.89 million deducted from non-attributed mothers, an annual increase of 51.08%.The overall performance is in line with our expectations. After the branch is mature, the profitability continues to increase, the scale effect gradually appears, and the profit margin increases significantly.The company’s gross profit margin is 46.67%, an increase of 3.At 71, we believe that the final result is: 1. The pilot effect of the new supply chain expansion model of the company since 2018 is being transformed; 2. After the provincial 重庆耍耍网 branch matures, revenues increase rapidly, and fixed cost changes are now relatively limited; sales expenses are reduced by 0.65%, a decrease of 0 compared with the same period last year.12 points; after adding back the R & D expenses, the management expenses are 13.30%, a decrease of 2 compared with the same period last year.39pct, we think that the main reason for the decline is the rapid increase in the provincial branch income, fixed rents, labor, the proportion of headquarters costs fell; financial expenses1.59%, a decrease of 0 compared with the same period last year.35 points.The net profit attributable to mother is 24.03%, an increase of 4 over the same period last year.05pct. Earnings forecast: We expect the company’s net profit attributable to its mothers to be 4 in 2019-2021.6.4 billion, 6.2.6 billion and 8.09% is 10%, with an annual increase of 40%, 35% and 29%; corresponding to 2019-2021 PE is 48X, 35X and 27X.The company is a leading enterprise in domestic stomatological hospitals. It has a strong certainty of expansion in the province, and expansion of its business lines outside the province and other business lines. It maintains the “highly recommended” level. Risk Catalysts: Surpassing Expected Profits and Expansion of the Old Hospital and Branches Prompt: The risk of the new hospital expanding faster than the expected profit; the risk of the old hospital failing to earn profits; the risk of medical accidents;