收入端稳中有进。分业务来看，2024 年前三季度，公司零售板块收入163.5 亿元，同比+9.7%，毛利率为37.3%（-1.8pct）；加盟及分销板块收入29.5 亿元，同比+25.9%，毛利率为10.9%（-0.6pct）。分产品来看，2024 年前三季度，公司中西成药收入147.1 亿元，同比+15.5%，毛利率为30.4%（-1.6pct）；中参药材收入22.7 亿元，同比+9.0%，毛利率为42.2%（-1.1pct）；非药品收入23.2 亿元，同比-4.3%，毛利率为42.3%（-3.4pct）。Matters:
The company announced revenue for the first three quarters of 24, 19.73, 0.86, and 0.85 billion yuan of non-net profit, with year-on-year changes of +11.3%, -26.9%, and -26.8%. Of these, 3Q24 revenue, net profit to mother, and net profit after deduction of non-net profit were +11.4%, -22.0%, and -27.1%.
Commentary:
There is steady progress on the revenue side. By business, in the first three quarters of 2024, the company's retail sector revenue was 16.35 billion yuan, +9.7% year-on-year, with gross margin of 37.3% (-1.8pct); revenue from the franchise and distribution sector was 2.95 billion yuan, +25.9% YoY, with a gross margin of 10.9% (-0.6pct). By product, in the first three quarters of 2024, the company's revenue for proprietary Chinese and Western medicines was 14.71 billion yuan, with a gross margin of 30.4% (-1.6pct); revenue from Chinese ginseng medicinal herbs was 2.27 billion yuan, +9.0% year-on-year, with a gross margin of 42.2% (-1.1 pct); non-drug revenue was 2.32 billion yuan, -4.3% YoY, with a gross margin of 42.3% (-3.4pct).
The pace of store expansion is adjusted dynamically, focusing on the quality of development. As of 2024Q3, the company had 10,718 stores (yoy +15.2%), 5,735 franchise stores (+57.4%), 16,453 full-caliber stores (+26.6%), and closed 452 stores (1H24 218) during the period. The company implements the strategy of deepening the layout of the country in South China. Through self-construction, mergers and acquisitions, and direct management of the troika, the company continues to promote encryption in strong regions and breakthroughs in weak regions, and continues to expand the empty space. Through continuous opening of new stores, mergers and acquisitions, and new expansion and franchise, the company will continue to sink into the secondary and tertiary markets in the already laid out regions, and simultaneously explore new markets in important regions; continuously expand the scale of the retail channel brand to enhance competitiveness, so as to continue to maintain its scale advantage.
Gross margin is under pressure in the short term, and the cost ratio is stable. 1) 3Q24 gross margin decreased 2.0pct yoy to 34.2%; 3Q24 net profit margin 3.3% (YoY -1.4pct); 2) 3Q24 sales rate rose 1.7pct to 24.8% yoy, management rate decreased 1.3pct to 4.1% yoy, and finance rate decreased 0.2pct to 0.7% yoy.
Investment advice: The company is deeply involved in South China and focuses on high-quality development. We expect the company's net profit to be 1.03/1.18/1.36 billion yuan in 24-26, with a year-on-year growth rate of -12%/+15%/+15%. Refer to industry comparable company valuations, and give the company a 25-year 18x target PE, corresponding to a target price of 18.7 yuan, maintaining a “recommended” rating.
Risk warning: Risk of business development falling short of expectations and policy fluctuations.
