DSL(SH:603233) EBSCN·2025-04-30 13:14Investment Rating - The report maintains a "Buy" rating for the company, indicating expected returns exceeding the market benchmark by more than 15% over the next 6-12 months [6]. Core Views - The company demonstrates solid cash cow attributes, with short-term profit pressures not undermining its long-term value. Despite a decline in net profit for 2024, the operating cash flow remains robust, reflecting the company's strong core business [2][4]. - The company is expanding its store network significantly, with a total of 16,553 stores as of the 2024 report, including 10,503 direct-operated and 6,050 franchised stores. This expansion is supported by a successful direct franchise model that enhances operational efficiency [3]. - The new retail model is maturing, with a high penetration of O2O delivery services and a growing B2C business, benefiting from policies promoting prescription drug separation [3]. Summary by Sections Financial Performance - For 2024, the company reported revenue of 26.497 billion yuan, an increase of 8.01% year-on-year, while net profit decreased by 21.58% to 915 million yuan. The first quarter of 2025 showed revenue of 6.956 billion yuan, up 3.02%, and net profit increased by 15.45% to 460 million yuan [1][2]. Store Network Expansion - The total number of stores reached 16,553 by the end of 2024, with a net increase of 2,479 stores during the year. The company has entered new markets, including Shanghai and Inner Mongolia, and plans to enhance regional coverage starting in the second half of 2024 [3]. Profit Forecast and Valuation - The profit forecast for 2025 and 2026 has been revised down to 1.048 billion yuan and 1.235 billion yuan, respectively, reflecting a decrease of 38% and 40% from previous estimates. The 2027 net profit is projected to be 1.437 billion yuan, representing a growth of 14.59% [4][5]. The current price corresponds to a P/E ratio of 20 for 2025, 17 for 2026, and 15 for 2027 [4].