Event: The company released its 2023 three-quarter report: 23Q1-3 achieved revenue of 12.813 billion dollars, an increase of 6.55% over the previous year; net profit of 686 million yuan, an increase of 1.26% over the previous year; net profit of 679 million dollars was deducted, an increase of 4.85% over the previous year.
23Q1-3 performance was in line with expectations, with short-term fluctuations on the Q3 profit side: 23 In the first three quarters, the company achieved revenue of $12.813 billion, up 6.55% year on year; net profit of 686 million yuan, up 1.26% year on year; net profit after deducting $679 million, up 4.85% year on year. In 23Q3, the company achieved revenue of 4.137 billion yuan, up 1.89% year on year; net profit of 181 million yuan, down 30.02% year on year; and net profit of 174 million dollars after deducting non-profit, down 30.33% year on year.
Deploy a large health industry, and revenue from non-pharmaceutical products is growing rapidly. The company lays out the big health industry, actively adjusts the categories in business, and adds products including beauty, personal care, infant formula, food synonymous with efficacy, medicine and food, and household chemicals with great health properties, etc., to further expand the company's business scope and enhance the company's market competitiveness. The non-pharmaceutical category of 2023Q3 companies achieved revenue of 1,231 billion yuan (+7.64% year-on-year), of which the beauty and personal care business achieved sales of 250 million yuan (+19.58% year-on-year).
New retail business+direct-run stores expand simultaneously, empowering online and offline sales. On the online side, with O2O business as the main line, the company lays out new e-commerce retail business. 23 In the first three quarters, the company's total new retail sales were 599 million yuan, of which the O2O business completed sales of 483 million yuan. On the offline side, the company is actively expanding its direct-run store network. At the end of 2023Q3, it had 10008 direct-run stores, a net increase of 802 stores over the beginning of the year. Among them, there are 1,231 chronic disease stores, 329 special disease stores, 213 dual-channel qualifying stores, and 735 outpatient coordination stores.
Profit forecast and valuation suggestions: Considering the increase in industry concentration and the acceleration of prescription outflow, the company's performance is growing rapidly, and the valuation is relatively low. The company's profit for the year 23-25 is estimated to be 10.2/12.1/1.42 billion yuan respectively, maintaining the “buy” rating.
Risk warning: store expansion falls short of expectations; outflow of prescriptions falls short of expectations; industry regulation risks.