LBX(603883) 国泰君安·2024-11-03 01:42Investment Rating - The report maintains a "Buy" rating for the company [5][3] Core Views - The company experienced revenue growth pressure, but the traditional Chinese medicine segment performed relatively well. The Torch project continues to operate steadily, with a sustained increase in gross margin [2][3] - For Q3 2024, the company reported revenue of 5.29 billion (up 1.18%) and a net profit attributable to shareholders of 127 million (down 37.32%), which is in line with expectations [3] - Due to slowing revenue growth and rigid expense outlays, the EPS forecast for 2024-2026 has been revised down to 1.09, 1.25, and 1.42 yuan respectively, while the target price has been raised to 21.25 yuan based on a PE of 17X for 2025 [3][5] Revenue Performance - Q3 2024 revenue breakdown: retail/franchise business revenue was 4.29 billion (up 2.2%) and 0.958 billion (down 4.0%) respectively. By product: Chinese and Western medicine revenue was 4.111 billion (down 0.7%), traditional Chinese medicine revenue was 0.498 billion (up 30.4%), and non-medicine revenue was 0.682 billion (down 3.8%) [3] - The slowdown in revenue growth is attributed to factors such as inventory pressure from pandemic-related products, tightening of out-of-hospital insurance policies in some regions, and a decrease in store opening rates [3] Gross Margin and Profitability - The gross margin for Q3 2024 was 32.93% (up 0.88 percentage points), continuing to improve throughout 2024 due to the Torch project optimizing gross margins through various initiatives [3] - The company has maintained good expense control, with sales expenses growing only 4.23% year-on-year in Q3 2024, but profit was still pressured due to rigid expenses and slowing revenue growth [3] Store Expansion and Market Strategy - As of Q3 2024, the company had 15,591 stores (10,300 direct and 5,291 franchise), with a slowdown in store growth and a significant reduction in acquisition numbers due to increased competition in the out-of-hospital retail market [3] - The company is focusing on improving operational quality and may increase acquisition numbers in the future as pressures on small and medium-sized pharmacies rise [3]