JZJ(SH:605266) Bank of China Securities·2025-05-26 08:15Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation that the stock price will exceed the benchmark index by more than 20% in the next 6-12 months [3][5]. Core Views - The company has faced short-term pressure on performance due to adjustments in medical insurance and tax issues, but there is potential for industry concentration to increase, and the company's store count continues to grow steadily. The established membership system and online business provide certain advantages, leading to a positive outlook for future development [3][5][8]. Summary by Sections Financial Performance - In 2024, the company achieved total revenue of RMB 9.283 billion, a year-on-year increase of 2.23%, and a net profit attributable to shareholders of RMB 128 million, a decrease of 69.08%. In Q1 2025, total revenue was RMB 2.294 billion, down 0.85%, with a net profit of RMB 34 million, down 35.85% [3][5][8]. Store Growth and Market Position - The company had a total of 5,486 stores by the end of 2024, with a net increase of 370 stores during the year. The membership base exceeded 26 million, with member consumption accounting for nearly 70% of total sales, supporting stable growth [8]. Industry Outlook - The report highlights that the domestic pharmacy retail industry still has significant room for improvement in concentration, with the current chain rate at 57.81% and a target of 70% by 2025. The top 100 pharmacy retailers accounted for 37.8% of the total retail market, indicating potential for further consolidation [8]. Online Business Development - The company's online business generated RMB 2.586 billion in revenue in 2024, representing 27.85% of total revenue and a year-on-year growth of 19.47%. The third-party O2O platform business contributed RMB 1.106 billion, growing by 33.37% year-on-year [8].