KPC(SH:600422) Soochow Securities·2024-03-22 16:00Investment Rating - The report maintains a "Buy" rating for Kunming Pharmaceutical Group [1] Core Views - The company achieved a total revenue of 7.703 billion yuan in 2023, a decrease of 6.99% year-on-year, while the net profit attributable to shareholders was 444.68 million yuan, an increase of 16.05% [1] - The report highlights that the business adjustments and impairment provisions have impacted the apparent performance, but the company is expected to be well-positioned for 2024 due to these adjustments and the integration efforts following China Resources' acquisition [1] - The strategic plan aims for a compound annual growth rate (CAGR) of over 20% in industrial revenue over the next five years, targeting a doubling of revenue by the end of 2028 [1] - The company has restructured its business lines into three divisions, focusing on brand rejuvenation and channel integration, which is expected to enhance brand value and operational efficiency [1] Summary by Sections Financial Performance - Total revenue for 2023 was 7,703 million yuan, with a year-on-year decline of 6.99% - Net profit attributable to shareholders was 444.68 million yuan, reflecting a year-on-year increase of 16.05% - The report projects revenues of 8,591 million yuan in 2024, with a forecasted CAGR of 11.53% [1][7] Strategic Planning - The company aims to achieve a revenue target of 10 billion yuan by 2028, with a focus on the health and chronic disease management sectors [1] - The strategic plan includes leveraging the historical brand "Kunzhong Medicine 1381" to enhance market presence and product offerings [1] Business Structure - The company has established three business units: "1381" for traditional Chinese medicine, "1951" for serious medical products, and "777" for oral formulations of Sanqi [1] - The restructuring is aimed at improving brand recognition and market penetration through targeted marketing and academic empowerment [1]