Investment Rating - The report assigns a "Buy" rating to Gushengtang (2273 HK) with a target price of HKD 48 98 [4][14] Core Views - Gushengtang is a leading player in the TCM (Traditional Chinese Medicine) diagnosis and treatment service industry with a strong presence both online and offline [1][3] - The company benefits from favorable policies supporting the TCM industry and the increasing demand for TCM services due to China's aging population [2][12] - Gushengtang's revenue grew from RMB 900 million in 2019 to RMB 2 32 billion in 2023 with adjusted net profit increasing from RMB 77 million to RMB 305 million during the same period [1] - The company's OMO (Online-Merge-Offline) model effectively integrates online and offline services enhancing patient experience and expanding market reach [3][85] Industry Overview - The TCM health industry in China is expected to grow from RMB 12 82 trillion in 2022 to RMB 18 16 trillion in 2025 with a CAGR of 12% [2] - TCM diagnosis and treatment services account for the largest share of the TCM health industry with a market size of RMB 5 76 trillion in 2022 expected to reach RMB 9 89 trillion by 2025 [2][39] - The penetration rate of TCM diagnosis and treatment services is projected to increase from 13 3% in 2019 to 19 6% by 2030 driven by policy support and the aging population [43][46] Company Operations - Gushengtang operates 74 offline clinics as of July 2024 covering major regions in China including East China South China and North China [1] - The company has a robust network of over 37 000 TCM practitioners including 14 000 with senior titles [3] - Membership revenue accounted for 47% of offline revenue in H1 2024 up from 25% in 2020 indicating strong customer loyalty [3][74] - Online business revenue increased to 10% of total revenue in H1 2024 driven by the OMO model and the acquisition of online platforms like Bailu [3][86] Financial Projections - Revenue is expected to grow from RMB 3 042 million in 2024 to RMB 5 006 million in 2026 with a CAGR of 28% [4][95] - Adjusted net profit is projected to increase from RMB 409 million in 2024 to RMB 691 million in 2026 [4][95] - The gross margin for the core medical health solutions business is expected to improve from 30 8% in 2024 to 32 3% in 2026 [10][95] Valuation - The report uses both relative and absolute valuation methods to derive a target price of HKD 48 98 [4][14] - Relative valuation based on a PE multiple of 28x suggests a fair value of HKD 51 05 [97] - Absolute valuation using the FCFF method yields a fair value of HKD 46 90 [103] Growth Drivers - Expansion through self-built and acquired clinics is expected to drive market coverage and revenue growth [13][105] - Increasing demand for TCM services due to rising chronic disease prevalence and aging population [13][105] - Potential for further policy support for the TCM industry [13][105]

Investment Rating - The report maintains a "Buy" rating for the company [1][4][9] Core Insights - The company is experiencing strong growth in patient visits, with a total of approximately 1.485 million visits in Q3 2024, representing a year-on-year increase of about 25% [6] - The company is expanding its physical presence, having opened 19 new stores in 2024, including 4 self-built and 15 acquired locations, primarily in key cities [6] - Revenue forecasts for 2024-2026 are projected at 30.74 billion, 39.52 billion, and 50.66 billion RMB, with adjusted net profits of 4.15 billion, 5.41 billion, and 7.06 billion RMB respectively [4][6] Financial Summary - For the fiscal year 2024, the company is expected to generate revenue of 3,074 million RMB, with a growth rate of 32.31% [3][7] - Adjusted net profit for 2024 is forecasted at 414.58 million RMB, reflecting a growth rate of 36.06% [3][7] - The adjusted net profit margin is projected to be 13.49% in 2024, with a return on equity (ROE) of 13.10% [3][7] Operational Highlights - The company has formed a strategic partnership with Meituan Medical to enhance online service coverage, allowing over 30,000 traditional Chinese medicine practitioners to provide services through the platform [4][6] - The company is focusing on scaling its operations in provincial capital cities and enhancing its online service capabilities [4][6]

Investment Rating - Buy (Maintained Rating) [1] Core Views - The company reported a steady growth in patient visits, with 1.485 million visits in Q3 2024, a 25% year-on-year increase, meeting expectations [2] - New clinics contributed significantly to the growth, with 77,000 visits from newly established medical institutions, accounting for 6.5% of the 25% growth rate, while existing clinics saw an 18.5% increase in visits [3] - The company expanded its network by adding 19 new clinics by the end of September 2024, including 4 self-built and 15 acquired, focusing on the Yangtze River Delta and central provincial capital cities, enhancing its revenue and profitability potential [3] - The traditional Chinese medicine (TCM) healthcare industry is experiencing strong demand, supported by favorable policies, and the company, as a leading TCM healthcare chain, has excellent cross-regional operational capabilities and significant advantages in brand, talent, and resources, indicating strong long-term growth potential [4] Financial Forecasts - Revenue forecasts for 2024-2026 are maintained at RMB 2.99 billion, RMB 3.89 billion, and RMB 4.97 billion, respectively [4] - Net profit attributable to shareholders for 2024-2026 is projected to be RMB 329 million, RMB 447 million, and RMB 585 million, respectively [4] - Earnings per share (EPS) for 2024-2026 are forecasted at RMB 1.34, RMB 1.82, and RMB 2.39, respectively [7] Operational Highlights - The company achieved a total of 1.485 million patient visits in Q3 2024, with new clinics contributing 77,000 visits and existing clinics seeing 1.408 million visits, a 18.5% year-on-year increase [3] - By the end of September 2024, the company added 19 new clinics, with a focus on the Yangtze River Delta and central provincial capital cities, forming a multi-clinic layout in key cities [3] Financial Data - As of November 7, 2024, the closing price was HKD 40.45, with a total market capitalization of HKD 9.78 billion [5] - The company's net asset value per share was HKD 10.43, with a debt-to-asset ratio of 31.33% [5] - The stock's highest and lowest prices over the past year were HKD 52.40 and HKD 32.70, respectively [5] Growth and Profitability Metrics - Revenue growth rates for 2023-2026 are projected at 43%, 28.5%, 30%, and 27.8%, respectively [13] - Net profit growth rates for 2023-2026 are forecasted at 37.6%, 30.5%, 35.7%, and 31%, respectively [13] - Gross margin, net margin, ROE, and ROA are expected to show steady improvements over the forecast period [13] Valuation Metrics - The company's P/E ratios for 2023-2026 are 35.1, 26.9, 19.8, and 15.1, respectively [7] - P/B ratios for the same period are 3.8, 3.6, 3.0, and 2.6, respectively [7]

Investment Rating - The report maintains an "Outperform" rating for Gushengtang (02273 HK) [3][7] Core Views - Gushengtang's Q3 2024 patient visits increased by 25% YoY to 1 485 million with newly established medical institutions contributing 6 5% to this growth [3][5] - The company demonstrated strong business resilience as a leading private TCM chain service provider maintaining high growth in patient visits despite weak overall consumer sentiment [4][6] - Gushengtang has established a comprehensive TCM physician training system and possesses strong potential for expansion and internal growth [4][7] Business Performance - Q1 Q2 and Q3 2024 patient visits were 1 074 million 1 309 million and 1 485 million respectively showing YoY growth rates of 42% 25% and 25% [4] - Cumulative patient visits for the first three quarters of 2024 reached 3 868 million a 29% YoY increase [6] - The company added 19 new stores in the first three quarters of 2024 (4 self built and 15 acquired) mainly in the Yangtze River Delta and central provincial capital cities [6] Financial Projections - Revenue for 2024 2025 and 2026 is projected to be RMB 3 059 billion RMB 3 992 billion and RMB 5 129 billion respectively with YoY growth rates of 31 7% 30 5% and 28 5% [4][7] - Adjusted net profit attributable to the parent company for 2024 2025 and 2026 is expected to be RMB 414 million RMB 523 million and RMB 659 million respectively with YoY growth rates of 35 9% 26 3% and 26 0% [4][7] - The current stock price corresponds to PE ratios of 24 1x 19 1x and 15 1x for 2024 2025 and 2026 respectively [4][7] Valuation and Comparison - Gushengtang's 2024E 2025E and 2026E EPS are projected to be RMB 1 68 RMB 2 12 and RMB 2 67 respectively with corresponding PE ratios of 24 1x 19 1x and 15 1x [9] - The company's PEG ratio for 2024E is 0 6 indicating potential undervaluation compared to peers [9]

Investment Rating - Buy (Maintained) [1] Core Views - The company's Q3 2024 operating trends are in line with expectations, with both new and existing stores contributing to growth [2] - The company is accelerating its scale layout in provincial capitals, with both organic growth and acquisitions driving expansion [2] - The company is enhancing patient service experience through multiple initiatives, including strategic partnerships and the establishment of a self-pay business system [3] - The company's "online + offline" business model is expected to further enhance revenue and profitability as the number of stores increases [3] - The company's core growth drivers include increased doctor resources and patient flow, with accelerated store expansion supporting future high growth [3] Financial Forecasts and Valuation - Revenue is expected to grow from RMB 1,627 million in 2022 to RMB 5,206 million in 2026, with a CAGR of 33.8% [1] - Net profit attributable to the parent company is forecasted to increase from RMB 183.29 million in 2022 to RMB 631.32 million in 2026, with a CAGR of 36.2% [1] - Non-GAAP net profit is projected to rise from RMB 200.81 million in 2022 to RMB 705.00 million in 2026, with a CAGR of 36.9% [1] - EPS is expected to grow from RMB 0.75 in 2022 to RMB 2.59 in 2026 [1] - The P/E ratio based on the latest diluted EPS is forecasted to decrease from 44.53 in 2022 to 12.93 in 2026 [1] Operational Highlights - In Q3 2024, the total number of visits reached approximately 1.485 million, a year-on-year increase of 25.0% [2] - New stores (including self-built and acquired) contributed 6.5% of the 25.0% growth rate, with approximately 77,000 visits [2] - The company has opened 74 offline TCM clinics in 20 cities (including Singapore), highlighting its chain, scale, and brand advantages [2] - The company is actively expanding into overseas markets, planning to establish an international headquarters in Singapore and cultivate international talents through the "Gusheng Shiqi TCM Master Class" [2] Strategic Initiatives - The company has entered into a strategic partnership with Meituan Healthcare, with over 70 TCM institutions and 30,000 TCM doctors joining the platform to provide appointment booking and online consultation services [3] - The company is gradually building a self-pay business system to meet diversified medical needs, aiming for sustainable growth [3] - The company's business model is expected to further leverage the advantages of "online + offline" integration, enhancing revenue and profitability [3] Financial Ratios and Metrics - The company's P/B ratio is 3.85, with a market capitalization of HKD 8,919.73 million [4] - The company's net asset per share is RMB 9.51, with a debt-to-asset ratio of 31.33% [5] - The company's ROIC and ROE are expected to increase from 12.60% and 10.94% in 2023 to 17.34% and 16.88% in 2026, respectively [12] - The company's gross margin is forecasted to remain stable at around 30%, with a net profit margin increasing from 10.86% in 2023 to 12.13% in 2026 [12] Historical Performance and Future Outlook - The company's revenue grew by 43.05% year-on-year in 2023, with net profit attributable to the parent company increasing by 37.59% [1] - The company's revenue is expected to grow by 32.05% in 2024, with net profit attributable to the parent company increasing by 26.47% [1] - The company's revenue growth is projected to remain strong, with a CAGR of 29.72% from 2024 to 2026 [1]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a potential upside of over 15% in the next 12 months [16]. Core Views - The company has shown strong operational growth, with a 25% year-on-year increase in patient visits in Q3 2024, and a 13.5% quarter-on-quarter increase [1]. - The management has raised the target for new store openings in 2024 to between 18 and 25, reflecting an aggressive expansion strategy [1]. - The company is benefiting from favorable government policies that support private healthcare institutions, which is expected to enhance its growth prospects [1]. - The company plans to increase shareholder returns, targeting a dividend and buyback ratio of 30-50% of net profit over the next 3-5 years [1]. Financial Performance - For FY24E, the company expects revenue of RMB 3,031 million, a 30.5% increase year-on-year, with adjusted net profit projected at RMB 388 million, reflecting a 27.4% growth [2][11]. - The adjusted earnings per share (EPS) for FY24E is forecasted to be RMB 1.59, with a projected adjusted P/E ratio of 21.1 [2][14]. - The company has achieved a significant increase in store openings, with 19 new stores added in 2024, compared to 9 in the previous year [1]. Market Position and Strategy - The company is positioned as a leader in the private traditional Chinese medicine sector, with a robust internal control system that supports sustainable growth amid regulatory scrutiny [1]. - The management has indicated that the acquisition cost for new stores is decreasing, with current P/S valuations around 0.8x, which is expected to remain below 1.0x for future acquisitions [1]. - The company has expanded its presence to 74 offline traditional Chinese medicine institutions across 20 cities, significantly increasing its market density in economically strong regions [1].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown strong growth in patient visits, with a total of 1.485 million visits in Q3 2024, representing a year-on-year increase of approximately 25% [3][4] - The company is expanding its business both organically and through acquisitions, having opened 74 traditional Chinese medicine clinics across 20 cities, including Singapore [5] - Revenue and profit forecasts for 2024-2026 indicate significant growth, with expected revenues of 3.118 billion, 3.923 billion, and 4.898 billion RMB, reflecting year-on-year growth rates of 34%, 26%, and 25% respectively [6][12] Summary by Sections Financial Performance - For 2024, the company is projected to achieve a net profit of 349 million RMB, with a year-on-year growth of 38% [6][12] - The company’s revenue for 2023 was 2.323 billion RMB, with a growth rate of 43% [12] - The projected return on equity (ROE) is expected to increase from 10.94% in 2023 to 16.31% by 2026 [12] Market Position - The company is recognized as a leading brand in the traditional Chinese medicine service sector, with a strong brand recognition and market influence [6] - The company’s operational resilience is highlighted by the robust growth in patient visits, particularly in established clinics [4][5] Future Outlook - The company is expected to continue its growth trajectory, with a focus on expanding its operational footprint both domestically and internationally [5][6] - The forecasted earnings per share (EPS) are projected to rise from 1.06 RMB in 2024 to 2.50 RMB by 2026 [12]

Investment Rating - The report maintains a "Buy" rating for the company Guoshengtang (02273) [1] Core Views - The company has shown strong operational data, with a focus on shareholder returns through share buybacks and increased earnings per share [4][5] - Guoshengtang is recognized as a leading player in traditional Chinese medicine services, demonstrating robust growth potential and strong cross-regional chain operation capabilities [5] Summary by Sections Recent Performance - In the third quarter of 2024, the company achieved an outpatient volume of 1.485 million visits, a year-on-year increase of approximately 25.0% [4] - The outpatient volumes for the first three quarters of 2024 were 1.074 million, 1.309 million, and 1.485 million, reflecting year-on-year growth rates of 42.1%, 24.7%, and 25.0% respectively [4] Shareholder Returns - As of October 31, 2024, the company repurchased 4.4677 million shares for a total amount of HKD 161 million, and has canceled a total of 2.5906 million shares in April and September 2024, enhancing earnings per share for long-term investors [4] Financial Forecast - The projected revenues for 2024, 2025, and 2026 are expected to be RMB 3.109 billion, RMB 4.054 billion, and RMB 5.287 billion, representing year-on-year growth rates of 34%, 30%, and 30% respectively [5][6] - The forecasted net profits for the same years are RMB 341 million, RMB 477 million, and RMB 665 million, with growth rates of 35%, 40%, and 40% respectively [5][6] - The company is expected to maintain a strong return on equity (ROE) increasing from 11% in 2023 to 20% by 2026 [6][9]

证 券 研 究 报 告 固生堂（02273.HK）2024 年三季报点评 推荐（维持） 三季度经营趋势维持高景气，扩张稳步推进 目标价：62.1 港元 当前价：36.55 港元 事项： 10 月 28 日公司公布三季度经营数据，公司 24Q3 诊疗人次 148.5 万，同比增 长约 25%，其中新成立的医疗机构诊疗人次 7.7 万，在整体增速中贡献约 6.5pct。此外，2024 年 9 月以来，公司用 2,674 万港元 10 次回购公司股份，合 计回购约 75.2 万股，彰显公司长期发展的信心。 评论： 公司核心线下业务增长动能强劲，扩张节奏始终保持在较快速度。分业务看， 2024 单三季度，公司诊疗人次同比增长约 25%，同时客单价增长约 3%，我们 预计整体收入实现 30%左右的增速。门店扩张方面，今年以来公司的新增门店 数量达到 19 家，其中自建 4 家，并购 15 家，数量保持在较高水平；同时随着 公司年初收购新加坡宝中堂后，成为中医医疗服务出海的重要里程碑。 自有医生贡献持续提升，助力公司盈利能力改善。根据管理层交流，截至 24Q3 公司的自有医生收入占比提升到 36%以上，相比去年持续提升。 ...

证券研究报告 | 公司动态点评 2024 年 10 月 30 日 固生堂（02273.HK） 内生+外延促业绩增长，六大战略方向支撑高质量可持续发展 | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------------|-------------------------------------|--------------------------|--------------------------|------------------------------------|----------------|---------------------------------------------|----------| | | | | | | | | | | 财务指标 | 2022A | 2023A | 2024E | 2025E | 2026E | 买入（维持评级） | | | 营业收入（百万元） | | ...