Yifeng Pharmary(SH:603939) China Post Securities·2024-09-02 05:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the benchmark index within the next six months [8]. Core Views - The company has demonstrated steady revenue and profit growth, with H1 2024 revenue reaching 11.762 billion yuan, a 9.86% increase year-on-year, and net profit attributable to shareholders at 798 million yuan, up 13.13% [5][6]. - The retail segment showed robust growth with revenue of 10.398 billion yuan (+8.32%), while the wholesale segment experienced rapid expansion with revenue of 999 million yuan (+20.91%) [6]. - The company continues to adhere to a regional focus strategy, expanding its store count to 14,736 by mid-2024, with a net increase of 1,486 stores compared to the end of 2023 [7]. Financial Performance - For H1 2024, the company reported a gross margin of 40.05% and a net margin of 7.31%, with a slight decrease in net margin by 0.15 percentage points [6]. - The company’s operating cash flow for H1 2024 was 1.822 billion yuan, reflecting a significant increase of 29.41% [5]. - The projected revenue for 2024-2026 is expected to be 24.921 billion yuan, 28.816 billion yuan, and 33.342 billion yuan respectively, with net profits projected at 1.599 billion yuan, 1.923 billion yuan, and 2.318 billion yuan [8][9]. Valuation Metrics - The current price-to-earnings (P/E) ratio is 14.41, with future P/E ratios projected at 15.29 for 2024, 12.71 for 2025, and 10.55 for 2026 [9]. - The price-to-book (P/B) ratio is currently at 2.49, expected to decrease to 2.11 by 2024 and further to 1.55 by 2026 [9].