What kind of business is Pien Tze Huang?
Text: Sweeping Monk Sima Yi Dubbing: Man Xichen
After getting through the part of being able to endure the loneliness, the next thing is to keep the prosperity. And keeping the prosperous part is tens of millions of times harder than enduring loneliness, which is comparable to the dangers of Mount Hua.
Hello everyone, today’s article is the 156th original article written by the sweeper Sima Yi. Time flies so fast, I have written more than 700,000 words in the past six months or so. If you want to interact with me, leave a message at the end of the article.
Including today’s article, reading the series of articles in Pien Tze Huang’s annual report, I have written 5 articles. The sweeper Sima Yi explained some highlights of this annual report from different angles. I wonder if my good friends are still unfinished? Tomorrow, the 2022 Pien Tze Huang quarterly report will be released. Today’s article is a summary and insight of the interpretation of Pien Tze Huang’s 2021 annual report. If you want to read other series of articles in Pien Tze Huang’s annual report, you can click the link below to view the Royal View.
First, review some important data in the annual report
The operating income was 8.022 billion yuan, a year-on-year increase of 23.2%; the net profit attributable to the parent was 2.431 billion yuan, a year-on-year increase of 45.46%. Net profit after deducting non-recurring gains and losses was 2.406 billion yuan, a year-on-year increase of 51.4%, and the profit growth rate was twice the revenue.
The return on equity was 27.68%, a year-on-year increase of 19.98%;
Net assets of 9.705 billion yuan, an increase of 23.44% over the previous year of 7.862 billion yuan;
The total assets were 12.495 billion yuan, an increase of 22.44% over the previous year’s 10.206 billion yuan.
Gross profit margin was 50.72%, a year-on-year increase of 45.16%, an increase of 5.56 percentage points;
The net profit margin was 30.72%, a year-on-year increase of 25.95%, an increase of 4.77 percentage points.
Sales expenses were 651 million, a year-on-year increase of 647 million, an increase of 0.62%;
The sales expense ratio was 8.12%, a year-on-year increase of 9.94%, an increase of -1.82 percentage points.
The management expense ratio was 377 million, a year-on-year increase of 335 million, an increase of 12.54%;
The management expense ratio was 4.70%, a year-on-year increase of 5.15%, an increase of 0.45 percentage points.
R&D expenses were 200 million, a year-on-year increase of 98 million, an increase of 104.56%;
R&D expenses accounted for 2.49% of revenue, a year-on-year increase of 1.50% and an increase of 0.99 percentage points.
Second, a plate of Pien Tze Huang’s inventory
Based on the data disclosed in Pien Tze Huang’s annual report, the main data of Pien Tze Huang’s inventory are: the inventory in 2020 is 2,045,300 boxes, a decrease of 443,400 boxes from 2,488,700 boxes in 2019, and a decrease of 44.1% compared with 2015; the inventory in 2021 It was 1,161,600 boxes, down 43% from 2020. It should be noted that the stock here is not only the core products of Pien Tze Huang. If you want to ask me about the stock of Pien Tze Huang core products. The sweeper Sima Yi didn’t know either. Since the company has put the data together, it just doesn’t want you to know too much. After all, it is a national double top secret.
Judging from the two main raw material stocks of natural musk and natural bezoar. The book value of APIs in 2020 is 1.337 billion and 1.493 billion in 2021. The stock consumption of natural bezoar is relatively large, down by 112 million. It can be seen that in the third quarter of 2020, in response to the scalper incident, the company traded volume for price, and consumed a lot of bezoar in order to eliminate scalpers. It can be reflected from another aspect: the high-speed growth in 2021 is an unconventional growth rate. Pien Tze Huang Company still hopes that Liu Jianshun will continue to grow steadily and grow steadily.
Explore Pien Tze Huang’s business model together
Mr. Duan Yongping said recently: The business model is the business model, the model that generates net cash flow. A good business model is very simple, that is, profits and net cash flow have been leveraged, and it is difficult for competitors to grab it even for a long time. “Time is the enemy of mediocre companies and the friend of great companies.” You can imagine, whose business is difficult to grab, and then think about why?
Generally speaking, business models often look at things like whether the moat is strong in the long term (continuity of product differentiation, including corporate culture), whether the long-term gross profit margin is reasonable (the substitutability of the product), and the long-term net cash. Is the flow (actually net profit in the long run) satisfied?
Everyone knows that Mr. Duan Yongping holds a heavy position in Kweichow Moutai. The interpretation of the business model he said is appropriate for Kweichow Moutai.
Here, the sweeping monk Sima Yi must apologize to the readers. In the previous article, regarding the proportion of monetary funds in total assets, he gave an example of Kweichow Moutai: In the 2021 annual report disclosed by Kweichow Moutai, the monetary funds reached 51.81 billion, The total assets of Kweichow Moutai are 255.2 billion, and the monetary assets account for 20.3%. An enthusiastic good friend in the background message explained to the sweeper Sima Yiyi that Kweichow Moutai has more than 100 billion in monetary funds in the financial company, so The more than 50 billion yuan in Kweichow Moutai’s annual report is just the tip of the iceberg. In this way, Kweichow Moutai’s currency proportion is also more than 50%, which is almost the same as that of Pien Tze Huang.
It is no exaggeration to say that within the reach of the sweeper Sima Yi, there is still no third such excellent company.
So what kind of business is Pien Tze Huang?
As far as Sima Yi, a sweeping monk, knows that Pien Tze Huang has more than 380 experience halls across the country, it is the same way of joining as an agent of Kweichow Moutai. It’s not through self-employment, which is very different from Tongrentang. The self-operated approach is actually an asset-heavy expansion approach. The franchise method transfers most of the operating costs and risks to the franchisee owner, and the company operates on an asset-light basis. To do this, companies must have strong brand appeal and channel control capabilities. Obviously, Kweichow Moutai and Pien Tze Huang have these two companies. Their franchisees are scrambling for businessmen all over the world.
As the saying goes, “the one with the greatest medicine is for the country and the people.” Pien Tze Huang’s general medicine and the Qingfei Detox Granules currently produced by Pien Tze Huang working overtime should indeed be positioned in this way in terms of medicine for people’s livelihood. But Pien Tze Huang’s core products are Pien Tze Huang tablets and Pien Tze Huang capsules. After all, it is a scarce product with limited production capacity. If it is defined as a people’s livelihood medicine that everyone can afford, then it is the wrong direction of operation.
From the perspective of the customer groups of Kweichow Moutai and Pien Tze Huang, the overlap between the two is very high. Almost 10% of the consumer groups contributed more than 90% of the profits. And this 10% consumer group is relatively affluent people. It is possible to expand into a middle-income group of 400 million to 500 million in the future. Therefore, the target customers of Pien Tze Huang’s core products must be high net worth groups. Pien Tze Huang Company should conduct meticulous research on the consumption habits, consumption behavior and consumption mentality of high net worth groups. Let Pien Tze Huang’s five attributes: medicines, health care products, gifts, collectibles, and luxury products to reappear.
In the view of the sweeper Sima Yi, Pien Tze Huang has the attributes of three-part medicine and seven-part wine. The trend of the stock price often follows the liquor and deviates from the track of traditional Chinese medicine. As a partner of Kweichow Moutai, as a good partner for drinking groups. Pien Tze Huang and Jiu Zhai Xing took off their hats, I don’t think they can go.
Among my big A shares, many companies have disadvantages other than being cheap and useless. Pien Tze Huang and Kweichow Moutai are all advantages except for being expensive. And this kind of price is dynamic. After the quarterly report is disclosed every year, their valuation will drop again. Looking 10 years later, what is the difference in valuation between Kweichow Moutai and Pien Tze Huang and the currently undervalued bancassurance real estate? We all say that investing in good industries, good companies, good prices, good industries and good companies are easier, but good prices are often very difficult to wait. Sometimes it takes 10 years to wait for a good price. Time is the most important. Good friends, sometimes I can buy a price that is not very friendly, but the stock price will slowly hit a new high through the digestion of time, just as Mr. Linyuan, a private stock market, said. After the disclosure of the quarterly report almost every year, great and good companies have to start a new wave of market prices.
Pien Tze Huang’s market value has increased from 1.6 billion in 2003 to 263.6 billion in 2021. In 19 years, the market value has increased by 165 times, with a compound annual growth rate of 30.83%. With dividends of 3.76 billion, the compound annual growth rate is 32.72%. According to the current dividend level, it seems that It was Kweichow Moutai in 2009. For investment to be successful, there is no other way to go, only the road of compound interest like Wang Fuji.
Text: Sweeping monk Sima Yi, your investment massage therapist
The road of investment needs to be felt with the feet, and the road of investment needs to be measured with the heart. It requires the perseverance of “Sima Yi” and the Zen mind of “Sweeping Monk”. This article is only for my investment record and thinking, investment is risky, and you need to be cautious when entering the market.
$Pien Tze Huang(SH600436)$ $Kweichow Moutai(SH600519)$ $Shouxiangu(SH603896)$
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