JZJ(SH:605266) Guotou Securities·2024-08-31 03:04Investment Rating - The investment rating for the company is "Buy-A" with a target price of 22.20 CNY per share, maintaining the rating [1][5]. Core Views - The company experienced a temporary decline in profit in H1 2024 due to various factors including reduced individual account balances and delays in the implementation of coordinated medical insurance [2][3]. - Revenue for H1 2024 was 4.485 billion CNY, a year-on-year increase of 3.40%, while net profit attributable to shareholders was 63 million CNY, a year-on-year decrease of 60.23% [2][3]. - The company is actively expanding its store network, with a total of 5,444 stores as of H1 2024, indicating stable growth in new and recently opened stores [4]. Financial Performance Summary - Revenue breakdown for H1 2024: - Prescription drugs: 1.572 billion CNY (+4.19%) - Over-the-counter drugs: 1.698 billion CNY (+7.23%) - Medical devices: 315 million CNY (-14.95%) - Health foods: 214 million CNY (-8.46%) - Traditional Chinese medicine: 165 million CNY (-12.82%) [3]. - Forecasted net profit for 2024-2026 is expected to be 174 million CNY, 201 million CNY, and 230 million CNY respectively, with an estimated EPS of 1.11 CNY for 2024 [5][7]. - The company’s financial metrics indicate a projected PE ratio of 20 times, with a target price of 22.20 CNY per share [5][7]. Store Network Expansion - The company continues to enhance its chain store service network, with 254 new stores built and 81 acquired in H1 2024 [4]. - The age structure of stores shows that 12.34% are less than one year old, 9.22% are two years old, and 78.43% are over two years old, suggesting a stable growth in profitability potential [4].