Zhongtou Securities has released a research report stating that due to increased industry competition and reduced personal account income for medical insurance, the average daily sales per store in the retail pharmacy industry from January to July 2024 has declined year-on-year. At present, the growth rate of the domestic physical pharmacy market scale is gradually slowing down, but the industry concentration is still low. Leading companies with the ability to expand and fine-tune management are expected to further promote industry consolidation through rapid expansion and continue to achieve growth higher than the industry.

From a macroeconomic perspective, affected by multiple factors, the average daily sales per store in the retail pharmacy industry from January to July 2024 has declined year-on-year.

Based on observations of monthly and quarterly data, the average daily sales per store in the domestic physical pharmacy industry from January to July 2024 has declined year-on-year, affected by increased industry competition and reduced personal account income for medical insurance. From the two dimensions of average customer unit price and order volume, the average customer unit price in the industry has declined more significantly year-on-year, while the industry's average store order volume has remained relatively stable (the average store order volume and average customer unit price of physical pharmacies from January to July 2024 both declined by 1.51% and 8.58% year-on-year; in the 30th week of 2024 (July 28-August 2), the average store order volume and average customer unit price increased by 2.11% and decreased by 6.33% year-on-year, respectively).

At the micro level, the market share of listed pharmacies continues to increase, with the potential to sustainably lead the industry in growth. The market share of the six major listed pharmacies in 2023 is only about 16.68%, and there is still significant room for improvement in the long-term industry concentration. From 2020 to 2023, the compound growth rates of the domestic retail pharmacy industry scale and the revenue of the six major listed pharmacies were 3.74% and 15.33%, respectively. Against the backdrop of a slowing industry growth rate, listed pharmacies are expected to achieve growth higher than the industry by virtue of their continued rapid store expansion.

At the micro level, the market share of listed pharmacies continues to increase, with the potential to sustainably lead the industry in growth. The market share of the six major listed pharmacies in 2023 is only about 16.68%, and there is still significant room for improvement in the long-term industry concentration. From 2020 to 2023, the compound growth rates of the domestic retail pharmacy industry scale and the revenue of the six major listed pharmacies were 3.74% and 15.33%, respectively. Against the backdrop of a slowing industry growth rate, listed pharmacies are expected to achieve growth higher than the industry by virtue of their continued rapid store expansion.

Risks: business impact of pharmaceutical new retail exceeding expectations; cross-regional expansion and operational risks; increased industry competition risks; pharmaceutical price reductions exceeding expectations; lower-than-expected prescription outflows.