Yixintang Pharmaceutical (SZ:002727) Soochow Securities·2024-05-01 03:08Investment Rating - The investment rating for the company is "Buy" (maintained) [1][17]. Core Views - The company achieved a revenue of 17.38 billion in 2023, a slight decrease of 0.29% year-on-year, with a net profit attributable to shareholders of 549.44 million, down 45.60% [16][17]. - The first quarter of 2024 showed a revenue increase of 14.96% year-on-year, reaching 5.10 billion, with a net profit of 242 million, up 1.03% [16]. - The company is expected to see gradual performance improvement as new stores ramp up operations, despite short-term profit pressure due to losses from newly opened stores [7]. Financial Performance Summary - In 2023, the gross profit margin was 33.00%, down 2.05 percentage points, and the net profit margin was 4.21%, down 1.46 percentage points [2]. - The sales expense ratio increased to 24.36%, while the management expense ratio decreased slightly to 2.46% [2]. - The company reported a total retail revenue of 12.63 billion from drug retail, down 7.00%, while wholesale revenue increased by 17.51% to 3.90 billion [2]. - The company’s cash flow from operating activities for 2023 was 2.115 billion, with a projected increase in cash flow for the following years [4]. Earnings Forecast and Valuation - The forecast for net profit attributable to shareholders for 2024 and 2025 has been adjusted to 1.015 billion and 1.183 billion, respectively, with a projected PE ratio of 12 and 11 [17]. - The company is expected to maintain a steady growth trajectory, with revenue projections reaching 20.51 billion in 2024 and 24.20 billion in 2025 [7][11].