Yixintang Pharmaceutical (002727) 东方证券·2024-09-09 04:05Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 13.80 CNY based on a 15x PE ratio for 2024 [3][6]. Core Insights - The company experienced profit pressure, with a revenue of 9.31 billion CNY in H1 2024, up 7.3% year-on-year, but a net profit of 280 million CNY, down 44.1% year-on-year, primarily due to a faster increase in operating costs compared to revenue growth, leading to a decline in gross margin [2]. - The company is rapidly expanding its store count, adding 1,317 new stores while closing 149, resulting in a net increase of 1,036 stores, totaling 11,291 stores as of H1 2024 [2]. - New retail business is growing rapidly, with sales of 640 million CNY in H1 2024, up 69.3% year-on-year, and O2O channel sales accounting for 77.5% of total sales [2]. Financial Summary - Revenue for 2024 is projected at 18.875 billion CNY, with a year-on-year growth of 8.6% [5]. - The company's gross margin is expected to decline to 31.5% in 2024, down from 33.0% in 2023 [5]. - The net profit attributable to the parent company is forecasted to be 550 million CNY in 2024, with a net profit margin of 2.9% [5].