LZYY(SH:603368) Guotou Securities·2024-04-28 10:30Investment Rating - The report assigns a "Buy-A" investment rating with a 6-month target price of 28.32 CNY, compared to the current stock price of 22.89 CNY as of April 26, 2024 [3][41][45]. Core Views - The company has demonstrated steady growth in its performance, with a 2023 revenue of 20.81 billion CNY, reflecting a year-on-year increase of 9.23%, and a net profit of 850 million CNY, up 21.11% [5][18]. - The wholesale segment shows robust growth, while the traditional Chinese medicine and retail sectors are expected to open new growth avenues [7][39]. - The company has optimized its product structure, aligning retail pharmacy offerings with hospital products, enhancing its competitive edge [11][39]. Summary by Sections Trading Data - Total market capitalization is approximately 9.13 billion CNY, with a circulating market cap of about 8.25 billion CNY. The total share count is 399.04 million, with 360.23 million shares in circulation [3]. Financial Performance - In 2023, the company achieved a gross margin of 11.89%, an increase of 0.38 percentage points, and a net margin of 4.08%, up 0.40 percentage points. For Q1 2024, the gross margin improved to 12.25% and the net margin to 5.20% [19]. - Revenue from the wholesale, retail, and industrial segments in 2023 was 16.79 billion CNY, 2.82 billion CNY, and 1.11 billion CNY respectively, with respective growth rates of 9.61%, -1.79%, and 39.65% [20]. Business Segments - The wholesale business benefits from comprehensive product coverage and the implementation of the SPD project, which enhances the medical device business [8][39]. - The retail segment is driven by differentiated product advantages and the expansion of DTP pharmacies, contributing to a gradual recovery in retail revenue and profit [23][39]. - The industrial segment, focusing on traditional Chinese medicine, is expected to sustain rapid growth, with over 1,100 processed traditional Chinese medicine products and various new quality products launched [24][39]. Growth Projections - The company anticipates revenue growth rates of 10.90%, 10.24%, and 9.61% for 2024 to 2026, with net profit growth rates of 20.74%, 20.31%, and 20.14% respectively [44].