深耕华南，三驾马车并行。公司贯彻落实深根华南布局全国的战略，通过自建、并购和直营式加盟三驾马车，持续推进强势区域的加密以及弱势区域的突破，并不断拓展空白区域。截至2024 年3 月31 日，公司拥有门店14915家（含加盟店 4610 家），2024 年1~3 月净增门店841 家，其中新开门店396 家，收购门店68 家，加盟店445 家，关闭门店68 家。Incident: Dashenlin released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 24.531 billion yuan (YoY +15.45%); net profit attributable to mother of 1,166 million yuan (+12.63% YoY); net profit after deducting non-attributable net income of 1,141 million yuan (YoY +13.56%); 2024Q1 achieved operating income of 6.752 billion yuan (YoY +13.54%) and net profit of 398 million yuan (YoY). -20.40%), the 2023 performance growth rate is in line with expectations, and the 2024Q1 performance is under pressure in the short term.
Under a high base, 24Q1 performance was under pressure in the short term. By product, traditional Chinese medicine, Chinese ginseng medicinal herbs, and non-pharmaceuticals achieved revenue of 176.99/29.74/3.259 billion yuan respectively in 2023, +16.62%/+15.04%/+7.93% year-on-year, respectively, and maintained steady growth. 2024Q1 Chinese and Western Proprietary Medicine/Chinese Ginseng Medicine/Non-Pharmaceutical achieved revenue of 50.32/788/771 million yuan respectively, compared with +21.37%/+8.62%/-14.76%, respectively. Chinese and Western proprietary medicines are required for consumption and pharmacy drainage products. Demand is relatively stable and continues to maintain a rapid growth trend.
In 2023, the company's net sales margin was 5.02% (-0.06pcts year on year), and the 2024Q1 net sales margin was 6.72% (year-on-year -2.10pcts). It is expected to be affected by two factors: 1) the share of low-margin wholesale business will increase; 2) the share of stores in South China will decrease as the business expands.
Deeply cultivate South China, and the troika goes hand in hand. The company implements a strategy that is deeply rooted in South China, continues to promote encryption in strong regions and breakthroughs in weak regions through self-construction, mergers and acquisitions, and direct management, and continues to expand the empty space. As of March 31, 2024, the company had 14,915 stores (including 4610 franchisees), with a net increase of 841 stores from January to March 2024, including opening 396 new stores, acquiring 68 stores, 445 franchised stores, and closing 68 stores.
Maintain a “buy” rating. The company's net profit for 24-26 is estimated to be 14.33/17.62/2.85 billion yuan, respectively, up 22.8%/23.0%/24.0% year-on-year, and EPS is 1.26/1.55/ 1.92 yuan respectively. Currently, the corresponding stock price valuations are 17.3x/14.1x/11.4x, respectively. Considering that the company is a leading pharmacy, the expansion strategy is progressing steadily, maintaining a “buy” rating.
Risk warning: industry policy risks, risk of expansion falling short of expectations, risk of prescription outflow falling short of expectations, etc.
