For the traditional Chinese medicine industry, which is currently on a fast development track, the speed and quality of expansion are probably one of the most intuitive indicators for evaluating the growth potential of related companies at this stage.
Taking Gushengtang (02273), a grassroots Chinese medicine service leading enterprise, as an observation sample, Gushengtang recently announced that its subsidiary plans to acquire 100% equity of Hunan Mingyuantang for 18 million yuan (RMB, the same below). It is understood that Hunan Mingyuantang has two Chinese medicine clinics and one Chinese medicine retail pharmacy, mainly engaged in Chinese medicine services and drug retail services in Hunan Province.
It is worth mentioning that this is the sixth time that Gushengtang has made a move to acquire external high-quality medical resources this year. Previously, in March, Gushengtang acquired Baozhongtang Singapore, taking the first step in internationalization; in the same month, Gushengtang acquired Kuanshan Laien, continuing to deepen its layout in the Yangtze River Delta; In May, Gushengtang also acquired Beijing Asian Games Village Chinese Medicine Hospital, Changshu Nanshantang, and 3 stores under Ningbo Guyuantang.
At the same time as accelerating external mergers and acquisitions, Gushengtang is also actively encrypting offline store networks through endogenous self-construction. In March of this year, Gushengtang's self-built store Shanghai Putuo Branch officially opened; two months later, Gushengtang's self-built Suzhou Wujiang Branch also successfully opened.
Counting the acquisition of Hunan Mingyuantang, Gushengtang's store network coverage area has been further expanded. According to the observation of the Wise Finance APP, since the establishment of the first offline Chinese medicine store in Guangzhou in 2010, Gushengtang's medical service network has had 69 offline stores, covering 18 cities at home and abroad. Among them, Singapore, Jiangsu Changshu and Changsha, Hunan are new cities for Gushengtang.
In terms of regional subdivisions, in addition to continuously deepening the development of the Zhujiang River Delta city cluster, in recent years, Gushengtang has also focused on channel construction in the Yangtze River Delta region. At present, the company's store network covers key cities such as Shanghai, Hangzhou, Suzhou, Nanjing, and Ningbo.
After completing the acquisition of Hunan Mingyuantang, Gushengtang's influence in central provinces has spread from Henan and Hubei provinces to Hunan Province. The Wise Finance APP believes that drawing on Gushengtang's successful experience in the Zhujiang River Delta and Yangtze River Delta, entering Zhengzhou, Wuhan and Changsha is just the first step for Gushengtang to develop the central region. Following the initial demonstration and scale effects formed in the central provinces, Gushengtang is expected to continuously seek to deepen the density of coverage of existing cities and develop more new cities in the central region.
Under the active and steady "self-built + acquisition" strategy, Gushengtang's scale is also expanding, benefiting more patients with medical needs. The latest data shows that in the first quarter of this year, Gushengtang's total customer visits were about 1.074 million, a year-on-year increase of 42.1%. Looking at it from a financial perspective, in 2023, Gushengtang achieved revenue of 2.323 billion yuan and a net profit of 253 million yuan, with year-on-year growth rates of 43% and 39.6% respectively, both of which refreshed historical highs.
With excellent historical performance combined with internal and external factors, Gushengtang's growth momentum is very strong, and the company's performance is expected to continue its high-growth trend in the next few years. Looking at the external environment, people's overall awareness of health has been increasing, and the demand for diagnosing and treating problems related to chronic diseases, sub-health, and other issues has been increasing day by day. At the same time, under the support of national policies, the prosperity of the Chinese medicine industry is continuously improving. Looking back at the company itself, given that the company maintains an active expansion pace and continues to integrate high-quality medical resources, upward and benevolent Gushengtang is expected to resonate with the booming Chinese traditional medicine industry and achieve high-quality development in the long period.