GLONGHUI, August 25 | CMB International released a research report to give pharmacists a “buy” rating. The target price is HK$57.97. Based on the 10-year DCF model, WACC is 13.7%. The bank expects Pharmacist Help 2023E/2024E/2025E's revenue to increase 25.4%/39.4%/36.3%, respectively, and the net profit after non-IFRS adjustments will be 179 million yuan/716 million yuan/1,415 million yuan, respectively. According to Frost & Sullivan's data, Pharmacist Help is the largest digital integrated service platform for the out-of-hospital pharmaceutical industry in China, with a market share of 21.0% of GMV (total commodity transactions) in 2022. The business model mainly includes platform business and self-operated business (including brand launch business). The research report points out that rapid digitalization will bring rich market opportunities. According to Frost & Sullivan data, the market size of China's out-of-hospital pharmaceutical distribution industry is expected to grow from 639.7 billion yuan in 2022 to 1 trillion yuan in 2027, with a compound annual growth rate of 9.6% (about 0.4% compared to the in-hospital market). However, the digitalization of out-of-hospital pharmaceutical distribution is still in its early stages. The GMV market share in 2022 was only 28.2%, leaving a lot of room for growth for participants. Currently, the market has problems of mismatch between supply and demand, high transaction costs, inefficient multi-level markets, opaque pricing, difficult product tracking, and lack of digital management tools. And with digital solutions, pharmacist help can effectively solve the above challenges faced by upstream sellers and downstream buyers. The research report also mentioned that the Pharmacist Help platform+self-operated market model has formed a vibrant ecosystem. Pharmacist Help's business growth is driven by the dual engine of platforms and self-operated businesses. The digital marketplace can provide buyers with a rich selection of SKUs, and the advantages of self-operated businesses include aggregating purchasing power, improving upstream bargaining power, and comprehensively controlling warehousing and fulfillment to improve delivery quality and stability. In 2022, the self-operated business accounted for 40.2% of the total GMV (23.7% in 2019), while the platform business accounted for 59.8% of the total GMV (76.3% in 2019).