维持增持评级 。2024Q3 公司实现收入 63.86 亿元（+11.4%），归母净利润2.01 亿元（-22%），扣非归母净利润1.94 亿元（-27%），业绩基本符合预期。考虑省外快速扩张阶段性影响盈利水平，下调2024-2026 年EPS 预测至0.90/1.06/1.23 元（原1.07/1.24/1.43 元），考虑板块估值水平提升，给予2025 年PE17X，上调目标价至18.02元，维持增持评级。Introduction to this report:
Revenue grew rapidly. Due to rapid expansion outside the province but relatively low profit levels and phased profit pressure, the company optimized gross margin and expense structure through various methods. It has already seen initial results and maintained an increase in holdings rating.
Key points of investment:
Maintain an increase in holdings rating. 2024Q3 achieved revenue of 6.386 billion yuan (+11.4%), net profit due to mother 0.201 billion yuan (-22%), and net profit after deducting non-attributable net profit of 0.194 billion yuan (-27%). The performance was basically in line with expectations. Considering the phased impact of rapid expansion outside the province on profit levels, the 2024-2026 EPS forecast was lowered to 0.90/1.06/1.23 yuan (originally 1.07/1.24/1.43 yuan), considering the increase in sector valuation level, the 2025 PE17X was given, and the target price was raised to 18.02 yuan, maintaining an increase in holdings rating.
Proprietary Chinese and Western medicines are growing rapidly, and new regions are expanding well. In the 2024Q3 segment, retail/wholesale achieved revenue of 5.287/0.978 billion yuan respectively, +13.0%/+12.5% year-on-year, achieving good growth.
By product, proprietary Chinese and Western pharmaceuticals/traditional Chinese medicines/non-pharmaceuticals achieved revenue of 4.754/0.756 billion yuan, or +15.5%/+9.6%/+2.1% over the same period. Demand for proprietary Chinese and Western medicines is growing well, and non-pharmaceutical products are expected to remain under pressure due to household inventories. In the subregion, South China/Central China/East China/Other regions achieved revenue of 39.0/0.63/0.49/1.241 billion yuan respectively, +3.4%/+19.8%/+15.9%/+51.2% YoY. Central China and other regions maintained relatively rapid growth driven by new stores.
Profits are under phased pressure, and the decline has narrowed. The 2024Q3 gross profit margin is 34.2% (-2.0pp), and the decline has narrowed. Since 2024, the gross margin pressure has been mainly due to an increase in the share outside of the province but low gross margin. By optimizing the category structure and enhancing brand cooperation, the 2024Q3 retail gross margin has increased 0.43pp month-on-month, showing initial results. It is expected to continue to improve in 2024Q4 and 2025. Due to the downward trend in the growth rate of the industry, the break-even period for newly opened stores was lengthened. The net profit of 2024Q3 declined significantly due to the rigidity of current cost investment, but the decline from 2024Q2 was clearly narrower, and the company is actively implementing fee control measures. The 2024Q3 sales/management/R&D/finance expense ratios were +1.7/-1.25/+0.08/-0.20pp, respectively. The management expense ratio showed a downward trend from month to month. As new stores gradually contribute profits, the company's performance is expected to grow faster.
The growth rate of stores has slowed slightly, the number of store closures has increased, and the quality of operations has been optimized. As of 2024Q3, the total number of company stores was 16,453 (10718/5735 direct-operated/franchised respectively), 2024Q3 added 44/136/356 new self-building/mergers and acquisitions/franchises respectively, and the growth rate of main stores/direct stores was 27%/15%, which slowed down; at the same time, 2024Q1-3 closed 452 stores, and the quality of store operations is expected to be optimized.
Risk warning: Market competition increases risk, and prescription outflow falls short of expected risk.
