Investment Rating - Buy rating is maintained for the company with a target price of HKD 57.88, representing a 35x PE multiple for 2024 and a market cap of RMB 12.8 billion [6][8][10] Core Views - The company achieved rapid growth in 2023 with revenue of RMB 2.323 billion (+43% YoY), net profit of RMB 253 million (+39.6% YoY), and adjusted net profit of RMB 305 million (+53.6% YoY) [2] - The company is a leading player in the TCM medical services industry with strong cross-regional operation capabilities, replicable business model, and significant advantages in brand, talent, and resources [6] - The TCM medical services industry is expected to experience high growth driven by strong demand and policy support [6] Financial Performance - Offline medical institutions generated revenue of RMB 2.037 billion (+49.2% YoY) driven by newly acquired and existing institutions, while online institutions contributed RMB 286 million (+10.2% YoY) [3] - The company served 4.297 million patient visits (+45.91% YoY) with an average spending per customer of RMB 541 (-2% YoY) and a customer retention rate of 65.2% (vs 64% in 2022) [3] - Gross margin was 30.13% (-0.62pct YoY), net margin was 10.86% (-0.42pct YoY), and adjusted net margin was 13.13% (+0.09pct YoY) [4] - Sales, management, and financial expense ratios were 12.11% (-0.65pct YoY), 6.66% (-0.49pct YoY), and 1.10% (+0.02pct YoY) respectively [4] Business Expansion - As of Dec 31, 2023, the company operated 56 medical institutions across 16 cities, having acquired 7 and self-built 2 offline institutions during the year [5] - The company has established partnerships with multiple third-party online platforms [5] Financial Projections - Revenue is forecasted to grow to RMB 3.002 billion (+29% YoY), RMB 3.746 billion (+25% YoY), and RMB 4.443 billion (+19% YoY) in 2024E-2026E [7] - Net profit is projected to reach RMB 367 million (+45.5% YoY), RMB 479 million (+30.6% YoY), and RMB 593 million (+23.7% YoY) in 2024E-2026E [7][15] - EPS is expected to be RMB 1.49, RMB 1.94, and RMB 2.40 in 2024E-2026E [7][12][13][14] Valuation - The company is trading at 41x PE and 4.5x PB for 2023A, with projected PE multiples of 28x, 22x, and 17x for 2024E-2026E [7][15] - EV/EBITDA is forecasted to decline from 16x in 2023A to 5x in 2026E [15]
2023年报点评：全年业绩高速增长，业务版图持续扩张