LBX(SH:603883) Donghai Securities·2025-08-28 08:37Investment Rating - The investment rating for the company is "Buy" (maintained) [2][6]. Core Views - The company is optimizing its store network and continuously advancing in the new retail sector, which is expected to improve its performance gradually [2][6]. - The company reported a revenue of 10.774 billion yuan in H1 2025, a year-on-year decrease of 1.51%, and a net profit attributable to shareholders of 398 million yuan, down 20.86% year-on-year. However, the decline in revenue and profit has narrowed compared to Q1 [6]. - The company is expanding its franchise business steadily, with a focus on new retail ecosystems. In H1 2025, the pharmaceutical retail business generated 8.815 billion yuan in revenue, a decrease of 2.30% year-on-year, while franchise and alliance businesses achieved 1.860 billion yuan, an increase of 1.16% year-on-year [6]. - The company is optimizing its direct store network while focusing on franchise market expansion. As of H1 2025, the total number of stores reached 15,385, with a net increase of 108 stores in the first half of the year [6]. - The company is expected to see a gradual improvement in performance, with projected net profits for 2025-2027 being 6.92 billion yuan, 7.99 billion yuan, and 9.09 billion yuan, respectively [6]. Summary by Relevant Sections Financial Performance - In 2022, the company's main revenue was 20.176 billion yuan, with a year-on-year growth of 28.5%. For 2023, the revenue is projected at 22.437 billion yuan, reflecting an 11.2% growth. However, a slight decline of 0.4% is expected in 2024 [4]. - The net profit attributable to shareholders was 785 million yuan in 2022, with a growth of 17.3%. The profit is expected to drop to 519 million yuan in 2024, a decrease of 44.1%, before recovering to 692 million yuan in 2025 [4]. - The gross profit margin is projected to be 32.98% in 2025, slightly decreasing from 33.17% in 2024 [4]. Market Strategy - The company is focusing on enhancing its professional pharmaceutical services, with 94.23% of its direct stores being traditional Chinese medicine stores and 42.32% being outpatient coordination stores [6]. - The company aims to capture market opportunities through a franchise model, which allows for market share expansion while reducing asset-heavy risks [6]. Future Outlook - The company is expected to maintain a steady growth trajectory in the new retail sector, with significant improvements anticipated in its operational reforms [6]. - The earnings per share (EPS) are projected to be 0.91 yuan in 2025, increasing to 1.20 yuan by 2027 [4].