Investment Rating - The report assigns a "Buy" rating for the company, with a target price of HKD 43.37 based on a 26x P/E ratio for 2025 [3][5]. Core Insights - The company is a leading player in the traditional Chinese medicine (TCM) chain service sector, with a strong AI strategy and significant growth potential. The revenue is projected to grow at a CAGR of 26.8% from 2018 to 2024, with 2024 revenue expected to reach HKD 30.2 billion, representing a 30.1% year-on-year increase [9][38]. - The TCM market in China is expected to grow significantly, with the market size projected to reach CNY 2.97 trillion by 2030, driven by factors such as an aging population and increasing public awareness of TCM [38][42]. Summary by Sections Company Overview - Established in 2010, the company has expanded its offline presence in major cities and developed an online platform, becoming a comprehensive TCM healthcare service provider [14][9]. - The company has achieved a stable business model integrating online and offline services, focusing on patient acquisition, consultation, diagnosis, and follow-up care [17][31]. Financial Performance - Revenue is forecasted to grow from HKD 2.32 billion in 2023 to HKD 5.72 billion in 2027, with a projected net profit of HKD 538.88 million in 2027 [3][4]. - The company has shown a consistent increase in adjusted net profit, with a forecasted growth of 31.4% in 2024 [27][36]. Market Potential - The TCM service market is characterized by high growth and low concentration, with the top five players holding only a 1.5% market share. The company currently holds a 0.2% market share, indicating significant room for growth [56][38]. - The demand for TCM services is driven by demographic changes, lifestyle diseases, and increasing cultural acceptance of TCM practices [42][38]. AI and Innovation - The company has been investing in AI since 2019, aiming to enhance TCM services and facilitate the internationalization of TCM products [9][3]. - Collaborations with institutions like West China Hospital and Baidu are underway to develop AI-assisted TCM solutions, which could revolutionize the delivery of TCM services [9][3]. Competitive Landscape - The TCM industry is fragmented, with many small players, creating opportunities for consolidation and growth for established companies like the one in the report [56][53]. - The regulatory environment is becoming increasingly favorable for private TCM institutions, promoting high-quality development in the sector [46][47].
固生堂（02273）：首次覆盖报告：国内中医连锁服务龙头，AI推动创新出海