New Journey(002219) 中邮证券·2024-08-31 13:30Investment Rating - The report assigns a "Buy" rating to the company, with a first-time coverage [2] Core Views - The company's hospital segment showed steady growth in H1 2024, with revenue increasing by 12.20% YoY to RMB 1.82 billion and net profit attributable to shareholders rising by 5.27% YoY to RMB 60 million [3] - The company's core hospitals demonstrated strong performance, with Wafangdian Third Hospital achieving an 8% YoY revenue growth to RMB 330 million and Lankao First Hospital growing 2.5% YoY to RMB 220 million [3] - The company's existing hospitals have high local market share and strong profitability, with a net profit margin of 9% in 2023 [4] - The company is expanding through new beds and asset injections, with plans to add 600 beds at Xuyi Hospital and 800 beds at Chongzhou Second Hospital [5] - The controlling shareholder plans to inject high-quality medical assets into the company within 5 years, potentially doubling the company's asset scale [6] Financial Performance - In H1 2024, the company's medical service revenue grew 2.98% YoY to RMB 1.45 billion, while pharmaceutical revenue surged 72.63% YoY to RMB 371 million [3] - The company's gross margin declined by 3.43 percentage points to 29.06% in H1 2024, mainly due to changes in business structure after acquiring Furen [3] - Operating cash flow increased by 15.5% YoY to RMB 145 million in H1 2024, while investment cash flow was -RMB 168 million and financing cash flow was -RMB 84 million [3] Expansion Plans - The company is actively expanding its hospital network, with new projects adding nearly 10,000 beds and existing bed utilization rate at around 90% [4] - Xuyi Hospital's new oncology building, adding 600 beds, started construction in October 2023, while Chongzhou Second Hospital's new 800-bed facility is expected to open in early 2025 [5] - Lankao First Hospital is preparing to establish a tumor center, and Siyang Hospital has obtained a license for a geriatric hospital and is applying for a tumor hospital license [6] Financial Projections - The company's revenue is expected to grow from RMB 4.105 billion in 2024 to RMB 5.838 billion in 2026, with net profit attributable to shareholders projected to increase from RMB 114.79 million to RMB 352.11 million [7][9] - EPS is forecasted to rise from RMB 0.03 in 2024 to RMB 0.10 in 2026, with P/E ratios decreasing from 51.67x to 16.84x over the same period [7][9] - The company's gross margin is expected to remain stable at around 29.5%-29.9% from 2024 to 2026, with net profit margin increasing from 2.8% to 6.0% [11]