Jointown(SH:600998) Orient Securities·2024-09-10 02:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of 5.39 CNY, based on a 11x PE ratio for 2024 [1][3]. Core Insights - The company's revenue for H1 2024 was 77.17 billion CNY, a year-on-year decrease of 2.8%, while the net profit attributable to shareholders was 1.21 billion CNY, down 10.1%. However, excluding seasonal factors like flu and pandemic impacts, revenue and net profit showed growth of 0.2% and 9.5% respectively [1]. - The CSO business segment saw significant growth, with revenue reaching 9.86 billion CNY, up 14.2% year-on-year, contributing to a second profit growth curve [1]. - The company is progressing well with its REITs strategy, aiming to complete public REITs issuance by October 2024, which is expected to enhance shareholder returns [1]. Financial Performance Summary - For H1 2024, the company reported a net operating cash flow of -3.2 billion CNY, a significant decline of 717.7% year-on-year, primarily due to slower accounts receivable collection. However, Q2 2024 showed a recovery with a cash flow of 450 million CNY, up 112.4% quarter-on-quarter [1]. - The company has adjusted its profit forecasts for 2024-2026, now projecting net profits of 2.446 billion CNY, 2.686 billion CNY, and 2.904 billion CNY respectively [1][2]. Strategic Developments - The new retail strategy has successfully increased C-end service capabilities, with franchise pharmacy revenue growing by 47.3% year-on-year to 2.42 billion CNY, and the number of new franchise stores reaching 5,499 by July 2024 [1]. - The company has also expanded its new medical services, aiming to exceed 800 "Jiuxin Clinics" by the end of 2024 [1]. Market Positioning - The company is focusing on enhancing its competitive advantage in the outpatient circulation market through new retail and medical strategies, which are expected to solidify its market position [1].