昆药集团：三季度表现稳健，持续深化品牌建设

Investment Rating - Maintain "Overweight" rating [1] Core Views - Q3 2024 performance was in line with expectations, showing steady year-on-year growth Despite a high base in Q3 2023 and short-term external pressures, the company demonstrated resilience and continued business optimization [2] - Brand building has driven steady growth in core products In the premium traditional Chinese medicine sector, the company focuses on "brand culture + category expansion + IP marketing" to enhance brand value and expand market reach For its Panax notoginseng business, the company has conducted nationwide promotional activities to increase public awareness of the efficacy of its products [2] - Profitability remained stable, with improved operating cash flow In the first three quarters of 2024, the gross margin was 40.91%, down 4.15 percentage points year-on-year, while the net margin increased by 0.09 percentage points to 7.16% Operating cash flow surged 694.80% year-on-year to RMB 216 million, mainly due to reduced market promotion expenses [3] Financial Performance - Revenue for the first three quarters of 2024 was RMB 5.457 billion, down 2.73% year-on-year, while net profit attributable to shareholders increased by 0.36% to RMB 387 million [2] - Q3 2024 revenue was RMB 1.903 billion, up 3.41% year-on-year, with net profit attributable to shareholders declining by 2.91% to RMB 158 million [2] - Forecasts for 2024-2026: Revenue is expected to grow to RMB 7.929 billion, RMB 8.947 billion, and RMB 10.059 billion, with year-on-year growth rates of 2.9%, 12.9%, and 12.4% respectively Net profit attributable to shareholders is projected to reach RMB 510 million, RMB 631 million, and RMB 777 million, with growth rates of 14.8%, 23.6%, and 23.2% respectively [3] Key Financial Metrics - Gross margin for 2024-2026 is forecasted at 43.6%, 44.0%, and 45.3% respectively [5] - ROE is expected to improve from 9.0% in 2024 to 11.6% in 2026 [5] - EPS for 2024-2026 is projected at RMB 0.67, RMB 0.83, and RMB 1.03 respectively [5]