Remember last week also discussed with you whether Tigermed may be underestimated, this week it released the results, the third quarter of a single quarter revenue growth rate reached 57.77%, while deducting non-net profit growth rate reached 67.63%, such a bright performance is really rare.
But what is confusing is that on the day of the release of the results, the company rose by nearly 7 percentage points, and then there was a sharper decline in the next two days.
Although we can't care too much about the fluctuations of short-term stock prices, let's study Tiger's three quarterly reports to compare insurance and see if Tigermed has been killed by mistake.
First, the performance has increased significantly, but the cash flow is not very good
In fact, under such a good performance, it is not interesting to look at the income statement, and the business model and scale advantages of the enterprise have not changed much in the operating performance.
So we turned our attention to the balance sheet and the cash flow statement;
First of all, we can find that Tigermed's operating cash flow in the single quarter in the third quarter is not as good as imagined, and the quality of its operating income has dropped significantly.
According to the data, in the single quarter of Q3 2021, Tigermed's net cash flow from operating activities/ net income from operating activities was only 57.46%, compared with 247.88% in the same period last year, and this data in the first three quarters of this year was also higher than the data of the Q3 single quarter.
(Net income from operating activities = Operating profit - Gain on change in fair value - Income from investments - Other income, etc.)
Second, the problem is not big, but it is good
Cash flow from operating activities is adjusted by reference to the income statement and balance sheet, and if there is a problem with operating cash flow, we will definitely look for answers in the other two statements.
After a series of analyses, we found that Tigermed's cash flow situation this year was not very good, especially in the single quarter of Q3 2021, which was actually under the pressure of internal cost expenses;
The bargaining power of enterprises on upstream and downstream has not deteriorated significantly.
This also ensures that Tigermed's current problems may not be caused by the competitive environment in the market, but due to short-term internal payment pressures or term mismatches.
As of the end of the third quarter of 2021, tigermed's business cycle was 45.85 days, which has dropped by 2.67 times compared with the first three quarters of 2019, of which the turnover rate of accounts receivable has reached 5.99 times, and the asset utilization efficiency has continued to improve;
In addition, the turnover rate of accounts payable has also continued to decline, reflecting the improvement of the company's ability to account for upstream payments.
Therefore, the problem of Tigermed this year mainly appears in the rapid growth of cash flow from operating activities, including the purchase of goods, cash paid for services, cash paid to employees and various taxes, etc. Their growth rate in recent years has been greater than the inflow of cash flow from operating activities (especially referring to the single quarter of Q3 2021).
But I don't think that's necessarily a good thing, and Tigermed's overall cash flow performance in the first three quarters has not deteriorated significantly.
On the one hand, cash expenditure in the third quarter is expected to be moderated for the fourth quarter, and most importantly, it will guide the growth rate of the company's performance in the next quarter. Tigermed's low cash flow expenditure base in the third quarter of last year corresponds to the fact that the growth rate of Q4 single-quarter performance is not high, and the increase in Q4 single-quarter expenditure has made Tigermed's performance in Q1 2021 this year maintain a good performance;
On the other hand, because Tigermed itself is currently in a period of expansion, the number of subsidiaries and employees continues to increase, and even the share payment fee in the first half of this year exceeded the amount of last year.
Third, Hillhouse Gülen reduced holdings? or indirectly affect market sentiment
Perhaps because hillhouse capital and Gülen, who has the title of "queen of medicine", have the role of investment in the early stage of medicine, after the release of the three quarterly reports of various pharmaceutical companies, the two for the reduction of pharmaceutical companies or drive the market sentiment.
We can see that Hillhouse withdrew from the list of the top ten circulating shareholders of Kelley Ying, Tigermed and Aier Ophthalmology in the third quarter;
However, it should be noted that for Tigermed, Hillhouse's shareholding at the end of the second quarter was 7.5 million shares, while the latest ninth largest circulating shareholder held nearly 8 million shares, and Hillhouse may also be squeezed out of the list.
In the proportion of the net value of Gülen related funds, Aier Ophthalmology has retreated to the second heavy stock due to the decline in net value, and the performance of the remaining pharmaceutical companies in the third quarter is not very optimistic, which has led to many rumors that Gülen has reduced its holdings in pharmaceutical stock companies, in fact, in addition to Changchun High-tech, Gülen's shareholding in other pharmaceutical companies has increased (represented by the Sino-European medical and health mix).
Fourth, to sum up
In general, after the analysis of Tigermed's third quarter report, Lixue found that there was no major problem with the company, although there were many differences in the pharmaceutical industry, and there were more fair value changes in Tigermed's own profits, so there was a certain risk, but the actual operating conditions of the enterprises were also beyond expectations.
In fact, last week in the "CRO four leading enterprises, who may be underestimated? I also said that the formation of Tigermed's valuation is not a matter of one day or two days, it is impossible to be killed for no reason, and the valuation shock is a relatively normal thing, of course, there is no harm in being cautious
(Disclaimer: The above analysis and discussion only represents the author's own views and is not intended as a specific investment recommendation.) ）
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