By-health(300146) 天风证券·2024-09-30 11:30Investment Rating - The report initiates coverage with a "Buy" rating for the company, with a target price of 16.7 yuan and a target market capitalization of 28.36 billion yuan [3][5] Core Views - The company is a leading brand in China's VDS (Vitamin and Dietary Supplements) industry, with a strong product portfolio and a dominant position in both online and offline channels [1][2] - The VDS market in China is expected to grow from 225.34 billion yuan in 2023 to 293.15 billion yuan by 2028, driven by increasing health awareness, aging population, and changing consumer behavior among the younger generation [1] - The company's core competitiveness lies in its diversified product matrix, strong R&D capabilities, and a well-established offline pharmacy channel, complemented by a rapidly growing online presence [2][3] Market Overview - The Chinese VDS market is expanding, with a CAGR of 8.47% from 2013 to 2023, and is expected to grow further due to rising health consciousness and an aging population [1][28] - Online channels now account for over 50% of VDS sales in China, surpassing traditional pharmacy and direct sales channels, with e-commerce platforms becoming a key focus for companies [1][32] - The market is highly fragmented, with the top 5 companies holding only 30% of the market share in 2023, indicating significant room for consolidation and growth for leading players [1][36] Company Strengths - The company has a comprehensive product portfolio, including flagship brands like "By-Health" and "Life-Space," and has successfully implemented a "big single product" strategy to dominate niche markets [2][44] - It has a strong offline presence, with over 50% of its revenue coming from offline channels, particularly pharmacies, where it has a competitive edge due to its extensive distribution network and professional sales support [2][52] - The company is aggressively expanding its online channels, with a focus on e-commerce platforms like Tmall and JD, as well as emerging platforms like Douyin and Kuaishou, achieving significant sales growth during key shopping festivals like Double 11 [2][3] Future Growth Drivers - The company plans to establish a digital marketing center in 2024 to further enhance its online capabilities and deepen its penetration in lower-tier markets [3] - It is actively expanding into Southeast Asia, leveraging its "Life-Space" brand to tap into the growing demand for health supplements in the region [3][37] - The company is investing heavily in R&D, with a focus on product innovation, new functional claims, and proprietary ingredients, which will help differentiate its offerings in a highly competitive market [42][43] Financial Projections - The company is expected to achieve revenues of 9.39 billion yuan, 10.47 billion yuan, and 11.73 billion yuan in 2024, 2025, and 2026, respectively, with net profits of 1.42 billion yuan, 1.69 billion yuan, and 1.98 billion yuan during the same period [3][4]