Pien Tze Yuen (600436): Contribution of price increase to profit growth rate is expected to exceed 10PCT

Pien Tze Yuen (600436): Contribution of price increase to profit growth rate is expected to exceed 10PCT

The domestic sales terminal raised the price by 11%, and the price increase was in line with expectations. The progress exceeded market expectations. On January 2

0, the company announced that the domestic retail price of Pianzai tincture tablets was raised from 530 yuan / capsule to 590 yuan / capsule, and the supply price was increased by about 40 yuan / cap., The export supply price will increase by about 5.

$ 80 per capsule.

The price increase 淡水桑拿网 this time is in line with expectations, and the price increase progress exceeds market expectations (the market expects price increases in 2020, the time point is related to factors such as inventory levels, chairman elections, etc.).

The company has announced operating income for 2019 on January 18, and its profit attributable to mothers increased by 20.

5%, 20.


We do not adjust our profit forecast for the time being, and we expect net profit attributable to mothers in 2019-2113.



3 ppm, an annual increase of 21% / 22% / 20%, giving a PE valuation of 48-50 times in 2020 (the average PE value in recent 5 years is 46x, raising or boosting the growth rate in 2020, giving a certain estimated premium), target price134.


40 yuan, maintain “Buy” rating.

Static calculation: If there is zero 南宁桑拿 growth in sales in 2020, price increases will contribute about 2 to performance.


Our static calculation of 400 million yuan price increase will contribute 2 to 2020 profit.

40,000 yuan (corresponding to the growth rate of return to motherhood in 2019 of about 16pct-18pct), based on 1) we expect domestic sales and sales to grow by 15?
20%, domestic sales tax-free price increase of about 35 yuan (equivalent to 13%), static calculation (without considering sales growth) profit increase is 1.


0 ppm; 2) We expect the export sales growth rate to be 10 in 2019?
20%, the export price excluding tax raises about 37.

5 yuan (5% tax rate, exchange rate 6.

8), static calculation (without considering sales growth) profit increase is 0.



Two variables affecting the calculation: distribution of actual sales volume and expenses 1) Actual sales volume: After the price increase of Tongrentang’s flagship product Angong Niuhuang Wan, which is close to the raw material of Pien Tze Huang at the end of 2019, the counter sales and consumers’ existence of Pien Tze Huang and its price expectationsEven if the company strictly monitors and avoids channel stocking, it still does not rule out the existence of a certain consumer inventory, which may affect the sales growth rate in 2020, especially 1Q20; 2) Expense distribution: the parent company and its subsidiaries (cosmetic subsidiaries, home(Chemical subsidiaries) will control sales expenses in 2019, which is reflected in the 1-3Q19 parent company’s sales expense ratio decreased by 0.

At 4pct, Jahwa’s 1H19 net profit reversed losses to surplus, and the cosmetics company’s 1H19 net profit rose by 13pct to 24%. It does not rule out profit from price increases instead of marketing.

We estimate that the actual contribution of the price increase to the growth rate of net profit attributable to mothers in 2020 is 10?
15pct refers to the price increase history of 2010-2013. The previous price increase has increased the net profit by about 85%. Based on the actual sales and expenses, we expect that the price increase will contribute 10% to the actual profit in 2020.

At the same time, we think that the short-term is 1?
Probability error of price increase again within 2 years, but there is still room for price increase in the long run.
4-year retail price may increase to 630?
660 yuan.

Risk Warning: The product supply exceeds expectations, and the terminal mobile sales exceed expectations.