DSL(SH:603233) Guoxin Securities·2025-11-18 13:58Investment Rating - The report assigns an "Outperform" rating for the company [6] Core Views - The company has shown impressive profit growth in the first three quarters of 2025, with revenue reaching 20.068 billion yuan, a year-on-year increase of 1.7%, and net profit attributable to shareholders of 1.081 billion yuan, up 26.0% [1][9] - The company is expanding its market presence across China, leveraging a combination of self-built stores, franchises, and acquisitions, establishing a leading position in the industry [3][78] - The company is expected to achieve revenue of 27.205 billion yuan in 2025, with a projected growth rate of 2.7% [3][101] Financial Performance - In the first three quarters of 2025, the company's sales expense ratio decreased to 21.8%, while the net profit margin improved to 5.8% [2][17] - The gross profit margin for the retail business was 37.7%, reflecting a 0.4 percentage point increase [2][17] - The company anticipates a steady increase in revenue and profit over the next few years, with net profit expected to reach 1.208 billion yuan in 2025, a growth of 32.0% [3][101] Business Model and Strategy - The company operates a diversified business model that includes direct retail, franchise operations, and distribution, focusing on high-margin products [41][90] - The company has developed a robust supply chain and logistics system to enhance operational efficiency and customer service [41][88] - The franchise model is becoming a significant growth driver, with the number of franchise stores increasing substantially [82][86] Market Position and Expansion - The company has established a strong presence in South China and is expanding into other regions, including the Yangtze River Delta and Northeast China [3][78] - As of the end of Q3 2025, the company had a total of 17,385 stores, with a significant proportion being franchise stores [28][80] - The company is well-positioned to capitalize on the ongoing transformation in the pharmacy industry, which is shifting from rapid expansion to deeper integration [3][44] Future Outlook - The company is expected to benefit from structural growth opportunities in the pharmacy sector, driven by trends such as prescription drug outflow and the professionalization of retail endpoints [3][60] - The projected revenue for 2026 and 2027 is 30.071 billion yuan and 33.363 billion yuan, respectively, indicating a positive growth trajectory [3][101]