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]

Investment Rating - The report maintains a "Recommended" investment rating for the company with a target price of 62.1 HKD, compared to the current price of 36.55 HKD [1][3]. Core Insights - The company's operational trends remain strong with a year-on-year increase of approximately 25% in patient visits for Q3 2024, contributing to an expected overall revenue growth of around 30% [2][3]. - The company has been actively expanding, adding 19 new stores this year, including 4 self-built and 15 through acquisitions, marking a significant milestone with the acquisition of a Singapore-based medical service provider [2]. - The proportion of revenue from in-house doctors has increased to over 36%, which is expected to enhance the company's profitability [2][3]. Financial Summary - The company’s total revenue for 2023 is projected at 2,327 million HKD, with expected growth rates of 30.6%, 30.7%, and 30.7% for 2024, 2025, and 2026 respectively [4][7]. - Adjusted net profits are forecasted to be 334 million HKD in 2024, 510 million HKD in 2025, and 728 million HKD in 2026, reflecting year-on-year growth rates of 32.5%, 52.7%, and 42.7% respectively [4][7]. - The current price-to-earnings (PE) ratios based on adjusted net profits are 24.5 for 2024, 16.1 for 2025, and 11.3 for 2026, indicating a favorable valuation compared to peers in the medical services sector [3][4].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index within the next six months [3][11]. Core Insights - The company is positioned as a leading player in the traditional Chinese medicine healthcare service sector, with a dual strategy of organic growth and external expansion. Revenue projections for 2024-2026 are estimated at 3.056 billion, 3.990 billion, and 5.189 billion CNY, respectively, with adjusted net profits of 400 million, 536 million, and 713 million CNY [3][4]. - The company has established six strategic directions for sustainable high-quality development, including prioritizing physician supply in major medical cities, expanding in provincial capitals, developing a self-pay business system, and pursuing systematic overseas expansion [2][3]. Financial Summary - Revenue growth rates are projected at 31.5% for 2024, 30.6% for 2025, and 30.1% for 2026, with adjusted net profit growth rates of 34.6%, 44.6%, and 39.0% for the same years [1][3]. - The company's return on equity (ROE) is expected to increase from 10.9% in 2023 to 18.8% by 2026, reflecting improved profitability [1][3]. - The price-to-earnings (P/E) ratio is projected to decrease from 33.2 in 2023 to 12.3 by 2026, indicating a potentially attractive valuation as earnings grow [1][3].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 70.08 [1][5][8] Core Views - The company's 3Q24 performance was strong, with total patient visits reaching 1.485 million (+25% YoY, +13.5% QoQ), driven by organic growth and new medical institutions [1] - The company is expected to achieve a 35-40% adjusted net profit growth in 2024, supported by online and offline expansion, same-store growth, and accelerated external expansion [1][5] - The report highlights the company's potential for both organic growth and external expansion, with 19 new medical institutions already established [1][3] Existing Clinics - The company's offline medical business revenue is expected to grow by 35% in 2024, driven by increased doctor numbers in key regions like Shanghai, Beijing, and Guangzhou [2] - The company's self-owned doctor contribution reached 36-37% in 3Q24, with a long-term target of 50%, which is expected to further optimize profit margins [2] New Clinics - The company acquired three new clinics in Suzhou, Kunshan, and Hangzhou in 3Q24, with controllable acquisition costs [3] - New clinics are expected to contribute approximately 10% of the company's revenue in 2024, with a total of 19 new clinics added so far and a full-year guidance of 17-22 new clinics [3] - Overseas expansion is progressing, with Singapore operations gradually ramping up, and further expansion expected in Malaysia, Hong Kong, and Taiwan [3] Policy and Repurchase - The government has introduced frequent policies to encourage traditional Chinese medicine (TCM) development, which benefits the company [4] - The company has conducted continuous share repurchases from January to September 2024, repurchasing 4.36 million shares for HKD 173 million, demonstrating confidence in its long-term growth [4] Financial Forecasts and Valuation - The company's adjusted net profit is expected to grow by 35-40% in 2024, with adjusted EPS projected at RMB 1.74, 2.30, and 2.93 for 2024-2026 [5][9] - The report assigns a 28x PE multiple for 2025, in line with comparable companies, reflecting the scarcity of TCM service providers and policy tailwinds [5] - Revenue is forecasted to grow from RMB 3.138 billion in 2024E to RMB 5.038 billion in 2026E, with net profit increasing from RMB 334.77 million to RMB 665.20 million over the same period [6][12]

出现还没有出来但是我相信也会是一个两维数的增速应该是所以继续都很强劲第二个就来自于我们看医生的供给端那么供给端这里面你会发现是同样的增长是强劲的在过去的两三年医生人数的供给大概增长在每年的10%左右 那主要的意义就是说我们在中国的二级医院特别是社区医生服务区的区壳都要求设置中医科或者是叫中医馆这样来进入供给端这种情况就是那么第三个呢 这次挑战也是政策清洗所以来自于支付端就是而对于支付端我们可以发现从21年的年底国家医保局跟中央管理局联合发布关于医保支持中医药的传承创新的具体措施所以在医保支付端对中医有清洗的政策有专门政策 特别对中医的医师病毒以及这个不参与第二期DAP机会的人这一些那么来自于资务端的在资务端的同时呢也非常缺失的态度就是来自于这种资务端的压力和挑战收支的这种不平衡我们通过的理解就是医保在未来的三年吧我认为都仍然在一个收支的一个平衡当中特别是来自于第一线城市 就可能会有一个1到3的再评论当中就是那么在于一线城市经济发达的一线城市和省级城市 因为我们的监管部门或者是我们的政策制定部门对于政策的测算严谨性 审讯性以及本身在经济上的韧性在制度端的政策的确定性是不错的而郭台铭我们的主要的业务主要在一线城市 ...

Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 38.10 HKD [3]. Core Insights - The company has shown strong internal growth, with a 25.0% year-over-year increase in patient visits in Q3 2024, totaling 1.485 million visits. New medical institutions contributed 6.5% to this growth, while existing facilities accounted for 18.5% [1]. - The company continues to expand its operations, adding 3 new stores in Q3 2024, bringing the total to 74 medical institutions. A total of 19 new stores are expected to be added throughout the year [1]. - The company has demonstrated effective acquisition and integration capabilities, which, combined with a mature model for replicating its business in new locations, supports its nationwide expansion strategy [1]. - The acquisition of Singapore's Baozhong Hall marks the beginning of the company's overseas expansion, leveraging domestic resources to enhance international operations [1]. - Revenue forecasts for 2024-2026 are projected at 3.020 billion, 3.911 billion, and 5.046 billion RMB, with year-over-year growth rates of 30.0%, 29.5%, and 29.0% respectively. Net profit is expected to reach 345 million, 474 million, and 637 million RMB during the same period [2][6]. Financial Summary - The company's total revenue for 2023 is reported at 2.323 billion RMB, with a growth rate of 43.0%. Adjusted net profit for the same year is 305 million RMB [2][6]. - The adjusted net profit is projected to grow significantly, with estimates of 412 million RMB in 2024, 551 million RMB in 2025, and 717 million RMB in 2026, reflecting growth rates of 35.1%, 33.8%, and 30.0% respectively [2][6]. - The company's P/E ratio is expected to decrease from 28 in 2023 to 12 by 2026, indicating an improving valuation as earnings grow [2][6].

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 1,364,979,000, representing a 38.4% increase from RMB 986,126,000 in the same period of 2023[11]. - Gross profit increased by 41.8% to RMB 401,212,000, up from RMB 282,945,000 year-over-year[11]. - Net profit for the period was RMB 107,275,000, a 15.1% increase compared to RMB 93,202,000 in 2023[11]. - Adjusted net profit rose by 45.3% to RMB 147,888,000, compared to RMB 101,759,000 in the previous year[11]. - Basic profit per share increased to RMB 0.44, up 12.8% from RMB 0.39[11]. - The company reported a gross margin of 29.4%, an increase from 28.7% in the prior year[11]. - Profit before tax increased to RMB 125,085,000, compared to RMB 106,990,000 in the previous year, reflecting a growth of 16.9%[176]. - Total comprehensive income for the period was RMB 115,030,000, compared to RMB 99,669,000 in 2023, marking a 15.4% increase[177]. Customer Growth and Engagement - The customer base grew steadily, with new customers increasing to 419,963 in the six months ended June 30, 2024, compared to 346,679 in the same period of 2023[48]. - The total accumulated customers reached 3,956,760 by the end of June 30, 2024, up from 3,079,503 in 2023[48]. - Customer visits increased to 2,383 thousand during the reporting period, compared to 1,806 thousand in the previous year[48]. - The customer return rate improved to 69.5% in 2024, up from 67.3% in 2023, indicating effective customer retention strategies[48]. - The average spending per customer visit increased to RMB 573 in 2024, compared to RMB 546 in 2023[48]. Operational Efficiency and Technology Integration - The company has established a digital clerk system to enhance customer interaction and improve customer experience, leading to increased customer visits and return rates[18]. - A client relationship management (CRM) system has been implemented to improve operational efficiency through digital analytics of medical professional teams[20]. - The company has built an intelligent prescription review platform to ensure compliance with national reimbursement programs and local medical insurance requirements[19]. - A closed-loop enterprise resource planning (ERP) system has been developed to enhance digital operations and management across the entire business process[21]. - The company plans to enhance its digital healthcare services by launching smart hardware devices to improve remote TCM healthcare capabilities, aiming for broader customer outreach[57]. Government Policies and Market Position - The company is well-positioned to benefit from favorable government policies promoting online healthcare services[12]. - The PRC government has introduced policies to promote the development of TCM, encouraging private capital to establish chains of TCM medical institutions, which supports the company's business model[22]. - The national reimbursement programs now include "Internet +" TCM healthcare services, allowing for adjustments in pricing and supporting the sale of decocting pieces at a markup of no more than 25%[23]. - The Physician Law encourages physicians to provide healthcare services at county-level medical institutions, further supporting the company's operational model[25]. - The company is positioned to leverage favorable government policies to achieve better growth in the TCM healthcare service industry[37]. Talent Development and Training - The company focuses on chronic disease management through a combination of TCM and western medicine, aiming for long-term follow-up and health management for customers[15]. - The strategy of "western medicine talent learning from TCM" is proposed to address the undersupply of TCM talent[30]. - The establishment of a three-tier talent cultivation system aligns with national policies to promote high-quality TCM talent[35]. - The mentorship model for training TCM talent has shown initial success, with the OMO platform facilitating knowledge sharing among physicians[56]. - The company aims for sustainable development by continuously expanding its medical talent pool with government support[36]. Financial Management and Capital Expenditure - The company aims to maintain sufficient cash and credit lines to meet liquidity requirements and maximize shareholder value[93]. - The company incurred capital expenditures of RMB37.8 million during the reporting period, an increase from RMB29.9 million for the six months ended June 30, 2023, primarily due to increased spending on offline medical institutions and office equipment[94][95]. - The company has sufficient financial resources to continue its share repurchase program while maintaining good financial conditions[170]. - The company reported finance costs of RMB 8,572,000 for the first half of 2024, down from RMB 15,914,000 in the same period of 2023, a reduction of approximately 46.5%[189]. Shareholder and Corporate Governance - The company declared an interim dividend of HK$0.13 per share for the six months ended June 30, 2024, amounting to approximately HK$31.53 million, compared to nil for the same period in 2023[99][102]. - The Company has adopted the Corporate Governance Code and has complied with all applicable provisions during the reporting period, except for code provision C.2.1 regarding the separation of roles of chairman and CEO[105][106]. - The Audit Committee has reviewed the unaudited interim results for the six months ended June 30, 2024, confirming compliance with relevant accounting standards and adequate disclosures as per Listing Rules[111]. - The Group provides competitive compensation packages, including base salary and performance-based bonuses, with performance targets set based on position and department[104]. Share Repurchase and Equity Management - The company repurchased a total of 2,801,200 shares during the six months ended June 30, 2024, at a total consideration of approximately HK$116,086,880[167]. - The company has been granted a general mandate to repurchase up to 24,079,645 shares, representing 10% of the total issued shares as of June 16, 2023[166]. - A new general mandate was granted on June 18, 2024, allowing the repurchase of up to 24,504,469 shares, also representing 10% of the total issued shares[166]. - The company aims to establish its own pharmaceutical manufacturing facility in the mid to long term based on business needs[116].

证券研究报告 | 公司动态点评 2024 年 09 月 11 日 固生堂（02273.HK） 与美团医疗达成战略合作，进一步提升中医服务数字化 | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------------------|-------|-----------------------------------------|-------------|-----------------------------------------------|-------------|--------------------------------------------|----------| | | | | | | | | | | | | | | | | | | | 财务指标 | 2022A | 2023A | 2024E | 2025E | 2026E ...

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 55.6, indicating a potential upside of 53.9% from the current price of HKD 36.1 [2][3]. Core Insights - The company, Gushengtang, is a leading chain of traditional Chinese medicine clinics, focusing on traditional Chinese diagnosis, integrated Chinese-Western medicine treatment, and the sale of Chinese medicinal products. Since its establishment in Guangzhou in 2010, it has expanded to 74 clinics across 15 cities in China and Singapore by July 2024 [2][5]. - In the first half of 2024, the company reported a 38.4% year-on-year revenue growth to HKD 1.36 billion, with an adjusted profit increase of 45.3% to HKD 150 million, excluding share-based payment impacts [2][5]. - The traditional Chinese medicine industry is experiencing rapid growth, driven by an aging population, increased health awareness, and strong government support. The number of traditional Chinese medical institutions in China reached 92,531 in 2023, a 13.2% increase year-on-year [2][19][20]. - Gushengtang's unique business model focuses on brand building, attracting quality physicians, and effective supply chain management for Chinese medicinal materials, positioning it as a top brand in the industry [2][5]. Summary by Sections Company Overview - Gushengtang is a leading provider of traditional Chinese medical health services, offering comprehensive solutions through both online and offline platforms. The company has established a network of 74 medical institutions across 19 cities and Singapore, with a focus on grassroots healthcare [5][13]. Financial Performance - For the first half of 2024, Gushengtang's revenue grew by 38.4% to HKD 1.36 billion, with an adjusted profit increase of 45.3% to HKD 150 million. The gross margin improved to 29.4%, while the effective tax rate rose to 14.2% [2][4]. Industry Analysis - The traditional Chinese medicine sector is projected to reach a market size of HKD 240-320 billion by 2030, with a compound annual growth rate (CAGR) of 15%. The industry is characterized by a fragmented market with significant consolidation potential [19][28]. Business Model - Gushengtang's business model leverages a combination of online and offline services, focusing on attracting renowned physicians and managing a robust supply chain for medicinal materials. The company aims to enhance its service capabilities through digitalization and the OMO (Online-Merge-Offline) model [15][30]. Growth Strategy - The company plans to continue expanding its clinic network and enhancing its service offerings, with a focus on integrating online and offline healthcare services. Gushengtang has also established partnerships with various hospitals and medical universities to strengthen its resource base [33][30].