Investment Rating - The report maintains an "Outperform" rating for Gushengtang (02273 HK) [3][7] Core Views - Gushengtang's Q3 2024 patient visits increased by 25% YoY to 1 485 million with newly established medical institutions contributing 6 5% to this growth [3][5] - The company demonstrated strong business resilience as a leading private TCM chain service provider maintaining high growth in patient visits despite weak overall consumer sentiment [4][6] - Gushengtang has established a comprehensive TCM physician training system and possesses strong potential for expansion and internal growth [4][7] Business Performance - Q1 Q2 and Q3 2024 patient visits were 1 074 million 1 309 million and 1 485 million respectively showing YoY growth rates of 42% 25% and 25% [4] - Cumulative patient visits for the first three quarters of 2024 reached 3 868 million a 29% YoY increase [6] - The company added 19 new stores in the first three quarters of 2024 (4 self built and 15 acquired) mainly in the Yangtze River Delta and central provincial capital cities [6] Financial Projections - Revenue for 2024 2025 and 2026 is projected to be RMB 3 059 billion RMB 3 992 billion and RMB 5 129 billion respectively with YoY growth rates of 31 7% 30 5% and 28 5% [4][7] - Adjusted net profit attributable to the parent company for 2024 2025 and 2026 is expected to be RMB 414 million RMB 523 million and RMB 659 million respectively with YoY growth rates of 35 9% 26 3% and 26 0% [4][7] - The current stock price corresponds to PE ratios of 24 1x 19 1x and 15 1x for 2024 2025 and 2026 respectively [4][7] Valuation and Comparison - Gushengtang's 2024E 2025E and 2026E EPS are projected to be RMB 1 68 RMB 2 12 and RMB 2 67 respectively with corresponding PE ratios of 24 1x 19 1x and 15 1x [9] - The company's PEG ratio for 2024E is 0 6 indicating potential undervaluation compared to peers [9]
固生堂：24Q3就诊人次同比增加25%，内生外延协同增长