The pace of store expansion is steady, and the number is in line with expectations. According to the company's 23-year performance report, as of the end of 23, the company had 10,255 direct-run chain stores, opening 1,381 new stores throughout the year, a net increase of 1,049, and the 23Q4 net increase of 247 stores. Overall, the company's store expansion pace is steady, and the number is in line with expectations. It is worth mentioning that since the second half of '23, the company's subsidiaries in Sichuan, Chongqing, Shanxi, Shanghai, Guizhou, and Tianjin began multi-batch, small-scale mergers and acquisitions. Among them, Sichuan Yixintang was the most frequent. It is easy to see that the company's offsite expansion has accelerated.
Moving out of Yunnan is imminent, and we look forward to overseas markets driving performance growth. As of 23Q3, the company had 5,358 stores in Yunnan Province, accounting for 53.54%, and 4,650 non-Yunnan stores, accounting for 46.46%. Non-Yunnan stores are mainly concentrated in the Sichuan and Chongqing regions. The two places have a total of 1983 stores, accounting for 19.8% of the total number of stores. Guangxi, Shanxi, Guizhou, Hainan and other places have 924 stores, 708, 510, and 410 stores respectively. The total number of stores in the remaining markets is 115. The company has gradually expanded its business scale in markets outside of Yunnan, with great results. It is expected that the scale effect will drive the company's overall performance growth.
Strengthen fine management capabilities, and maintain rapid growth in online business. The company's online business is mainly based on O2O. Total online sales reached 599 million yuan in the first three quarters, of which O2O sales were 483 million yuan. The business scope has now exceeded 10 provincial administrative regions. The number of online stores has reached 9580, and the store launch rate is as high as 95%. In addition, the company has also made achievements in the field of health sales and membership management. In the first three quarters, the company achieved revenue of 1,231 billion yuan, an increase of 7.64% over the previous year, and the beauty and personal care category achieved revenue of 250 million yuan, an increase of 19.58% over the previous year; the number of members increased to 41.8 million, and the repurchase rate was further improved, thus creating a firm membership base for the company's subsequent development.
Due to the decline in demand for pharmaceuticals related to the epidemic and the impact of other one-time factors during the year, we lowered the company's earnings per share for 23-25 to 0.92, 1.67, and 1.96 yuan respectively (the original forecast earnings per share for 23-24 were 2.01 and 2.38 yuan, respectively). Based on comparable company valuations, the 24-year PE valuation was 13 times, corresponding to a target price of 21.71 yuan, and maintained the purchase rating
Risk warning
Internet pharmacy competition intensifies, health insurance policies are being tightened, and competition within the industry is intensifying