DSL(SH:603233) Western Securities·2025-11-04 06:24Investment Rating - The investment rating for the company is "Buy" [5][3]. Core Insights - The company reported a revenue of 20.068 billion yuan for Q1-Q3 2025, representing a year-on-year increase of 1.71%, while the net profit attributable to shareholders was 1.081 billion yuan, up 25.97% year-on-year [1][5]. - The company has entered a phase of optimizing store layouts and focusing on direct franchise stores, with a total of 17,385 stores as of Q3 2025, including 7,029 franchise stores [2]. - The retail business gross margin increased to 37.70%, and the sales expense ratio improved to 21.78% [2]. Financial Performance Summary - For Q1-Q3 2025, the company achieved a revenue of 20.068 billion yuan, with a net profit of 1.081 billion yuan, and a net profit excluding non-recurring items of 1.073 billion yuan [1][5]. - The revenue from traditional Chinese and Western medicine was 15.451 billion yuan, with a gross margin of 30.12% [1]. - The company expects EPS of 1.06, 1.21, and 1.41 yuan for 2025, 2026, and 2027 respectively [3]. Store Expansion and Management - The company completed its cross-province expansion and is now focusing on increasing market share in existing provinces, with a net increase of 832 stores in Q1-Q3 2025 [2]. - The company has optimized its store network by closing 447 stores while opening 300 new self-built stores and adding 979 franchise stores [2]. Profitability and Efficiency - The company is benefiting from improved gross margins in non-pharmaceutical products, which increased to 45.62% [1]. - The digital transformation has enhanced operational efficiency, contributing to a competitive advantage [2]. Future Earnings Projections - The company is projected to have a revenue of 27.186 billion yuan in 2025, with a growth rate of 2.6% [4]. - The net profit attributable to shareholders is expected to reach 1.205 billion yuan in 2025, reflecting a growth rate of 31.7% [4].