老百姓（603883）：利润短期承压，期待25年表现

Investment Rating - The report maintains a "Buy" rating for the company, with a previous rating also being "Buy" [1][5]. Core Views - The company reported a revenue of RMB 22.358 billion for 2024, a slight decrease of 0.36% year-on-year, and a net profit of RMB 5.19 billion, down 44.13% year-on-year. The first quarter of 2025 saw a revenue of RMB 54.35 billion, a decrease of 1.88% year-on-year, with a net profit of RMB 2.51 billion, down 21.98% year-on-year. Despite short-term profit pressures, the company is expected to improve profitability through its franchise business and Torch project [3][5][8]. Summary by Sections Financial Performance - In 2024, the company achieved a total revenue of RMB 22.358 billion, with a net profit of RMB 5.19 billion, reflecting a year-on-year decrease of 44.13%. The first quarter of 2025 showed a revenue of RMB 54.35 billion and a net profit of RMB 2.51 billion, both lower than the previous year [3][8]. Profitability Forecast - The adjusted net profit forecasts for 2025-2027 are RMB 6.91 billion, RMB 10.00 billion, and RMB 11.47 billion respectively, with corresponding EPS of RMB 0.91, RMB 1.32, and RMB 1.51. The valuation multiples based on the closing price as of June 11, 2025, are 22.9x, 15.8x, and 13.8x for the respective years [5][7]. Business Expansion - The company has expanded its store network to 15,252 locations, including 9,844 direct-operated stores and 5,408 franchise stores. The franchise business is growing rapidly, with a 62% share of old store franchises, up 34 percentage points year-on-year. The franchise business generated over RMB 5.8 billion in distribution revenue in Q1 2025 [8][9]. Strategic Initiatives - The Torch project is aimed at enhancing profitability and exploring new growth avenues. In Q1 2025, the company achieved a gross margin of 34.22%, with offline sales gross margin increasing by 0.70 percentage points year-on-year. The company is also diversifying its projects to increase the non-pharmaceutical sales ratio [8][9].