Investment Rating - The report maintains a "Buy" rating for the company, indicating a potential upside of over 15% in the next 12 months [16]. Core Views - The company has shown strong operational growth, with a 25% year-on-year increase in patient visits in Q3 2024, and a 13.5% quarter-on-quarter increase [1]. - The management has raised the target for new store openings in 2024 to between 18 and 25, reflecting an aggressive expansion strategy [1]. - The company is benefiting from favorable government policies that support private healthcare institutions, which is expected to enhance its growth prospects [1]. - The company plans to increase shareholder returns, targeting a dividend and buyback ratio of 30-50% of net profit over the next 3-5 years [1]. Financial Performance - For FY24E, the company expects revenue of RMB 3,031 million, a 30.5% increase year-on-year, with adjusted net profit projected at RMB 388 million, reflecting a 27.4% growth [2][11]. - The adjusted earnings per share (EPS) for FY24E is forecasted to be RMB 1.59, with a projected adjusted P/E ratio of 21.1 [2][14]. - The company has achieved a significant increase in store openings, with 19 new stores added in 2024, compared to 9 in the previous year [1]. Market Position and Strategy - The company is positioned as a leader in the private traditional Chinese medicine sector, with a robust internal control system that supports sustainable growth amid regulatory scrutiny [1]. - The management has indicated that the acquisition cost for new stores is decreasing, with current P/S valuations around 0.8x, which is expected to remain below 1.0x for future acquisitions [1]. - The company has expanded its presence to 74 offline traditional Chinese medicine institutions across 20 cities, significantly increasing its market density in economically strong regions [1].
固生堂：民营中医龙头逆势起航