2023 年公司零售业务实现收入205.09 亿元，同比增长6.58%；受益于加盟门店快速增长，加盟及分销业务实现收入34.23 亿元，同比增长122.46%。公司在各地区的发展基本平衡，在华南地区通过成熟品牌市场效应保持销售的稳步增长，同时积极实施省外扩张战略，2023 年华南地区实现收入164.12 亿元，同比增长7.86%；华中地区实现收入22.88 亿元，同比增长12.84%；华东地区实现收入17.88 亿元，同比增长21.38%；其他地区实现收入34.44 亿元，同比增长66.84%。Incidents:
The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 24.531 billion yuan, an increase of 15.45%; net profit to mother of 1,166 billion yuan, an increase of 12.63% year on year; net profit after deduction of 1,141 billion yuan, an increase of 13.56% year on year. In the first quarter of 2024, revenue was 6.752 billion yuan, up 13.54% year on year; net profit to mother was 398 million yuan, down 19.79% year on year; net profit after deduction was 396 million yuan, down 20.40% year on year.
Deeply cultivate the South China market and strengthen national competitiveness
In 2023, the company's retail business achieved revenue of 20.509 billion yuan, an increase of 6.58% over the previous year; benefiting from the rapid growth of franchise stores, the franchise and distribution business achieved revenue of 3.423 billion yuan, an increase of 122.46% over the previous year. The company's development in various regions is basically balanced. In South China, it has maintained steady sales growth through mature brand market effects, while actively implementing an expansion strategy outside the province. In 2023, South China achieved revenue of 16.412 billion yuan, up 7.86% year on year; Central China achieved revenue of 2,288 billion yuan, up 12.84% year on year; East China achieved revenue of 1,788 billion yuan, up 21.38% year on year; and other regions achieved revenue of 3.444 billion yuan, an increase of 66.84% year on year.
The store continues to expand, and self-building+mergers and acquisitions+joint efforts
The company continues to expand the number of stores. By the end of 2023, it had covered 19 provinces across the country, with 14,074 stores, including 9,909 directly-managed stores and 4,165 franchised stores. In 2023, the company opened 1,382 new self-built stores, 2,158 franchised stores, acquired 750 stores, and closed 261 stores. The company actively undertook the outflow of prescriptions. By the end of 2023, it had 227 pharmacies specializing in DTP, 9,100 designated stores with personal accounts, and 1,985 designated stores with various types of co-ordinated reimbursement, including 1,281 outpatient co-ordinated stores, 574 dual-channel designated stores, and 21 designated stores with slow doors.
Profit Forecasts, Valuations, and Ratings
Considering the uncertainty of industry development during the policy transition period, we expect the company's revenue for 2024-2026 to be 293/351/423 billion yuan, corresponding growth rates of 19.34%/19.94%/20.44%, respectively; net profit to mother will be 14.20/17.46/ 2.096 billion yuan, corresponding growth rates will be 21.75%/22.94%/20.05%, EPS 1.25/1.53/1.84 yuan, respectively, and a 3-year CAGR of 21.58%. The company is a leading pharmacy leader in China. Referring to comparable company valuations, the company was given 21 times PE in 2024, corresponding to a target price of 26.19 yuan, maintaining an “gain” rating.
Risk warning: prescription outflow falls short of expectations; declining profitability; risk of policy changes; increased market competition; store expansion falls short of expectations.
