Yixintang Pharmaceutical (SZ:002727) Guotai Junan Securities·2024-04-29 05:02Investment Rating - The report maintains a rating of "Buy" for the company, with a target price of 26.60 CNY, which corresponds to a PE ratio of 16X for the year 2024 [6][7]. Core Views - The company's revenue and store opening growth have improved, indicating a positive operational trend. Despite facing pressure from base effects and external environments in 2023, the company is expected to achieve stable growth throughout the year [6][7]. - The report highlights that the company's performance in 2023 met expectations, with a revenue of 17.38 billion CNY, a slight decrease of 0.29%, and a net profit attributable to shareholders of 549 million CNY, down 45.6% [6][7]. - The company is projected to recover in 2024, with an expected revenue increase to 20.06 billion CNY, representing a growth of 15.4% [6][7]. Summary by Sections Performance Overview - In 2023, the company faced challenges due to high base effects and external factors, but revenue growth has shown signs of recovery, with an anticipated stable development for the full year [6][7]. - The company achieved a net profit of 549 million CNY in 2023, down 45.6%, while the net profit excluding non-recurring items was 732 million CNY, down 25.94% [6][7]. Financial Forecast - The financial forecast for 2024 estimates a revenue of 20.06 billion CNY and a net profit of 1.006 billion CNY, indicating a significant recovery [6][7]. - The report projects an EPS of 1.69 CNY for 2023, with expectations to rise to 1.98 CNY in 2024 [6][7]. Business Expansion - The company plans to accelerate store openings, with a net increase of 1,049 stores expected by Q1 2024, reflecting a growth rate of 11% for direct stores [6][7]. - The report notes a shift in store distribution, with a decrease in the proportion of stores in Yunnan and an increase in other provinces, which is expected to drive overall revenue growth [6][7]. Market Position - The company is recognized as a leading player in the pharmaceutical retail sector, with a strong presence across multiple provinces in China [6][7]. - The diversification into health-related products and participation in the elderly care industry are seen as potential growth drivers for the company [6][7].