DSL(SH:603233) Soochow Securities·2024-05-02 02:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 245.31 billion yuan in 2023, representing a year-on-year growth of 15.45%, and a net profit of 11.66 billion yuan, up by 12.63% [3] - In Q1 2024, the company achieved a revenue of 67.52 billion yuan, an increase of 13.54%, but the net profit decreased by 19.79% to 3.98 billion yuan [3] - The franchise business saw over 100% growth in 2023, with retail drug sales reaching 205.09 billion yuan, a growth of 6.58% [3] - The company aims to recover growth in the second half of 2024 after experiencing profit pressure in Q1 due to new store openings [4] Summary by Sections Financial Performance - Total revenue for 2023 was 245.31 billion yuan, with a year-on-year growth of 15.45% [3] - The net profit for 2023 was 11.66 billion yuan, reflecting a 12.63% increase [3] - Q1 2024 revenue was 67.52 billion yuan, up 13.54%, while net profit fell to 3.98 billion yuan, down 19.79% [3][4] Business Segments - Retail drug sales contributed 205.09 billion yuan in 2023, with a gross margin of 38.15% [3] - Franchise and distribution revenue reached 34.23 billion yuan, growing by 122.46% [3] - The company achieved a gross margin of 35.90% for the full year 2023, down by 1.90 percentage points [3] Store Expansion - The company had a total of 14,074 stores by the end of 2023, with 9,909 direct-operated and 4,165 franchised stores [3] - In 2023, the company added 1,382 self-built stores and 2,158 franchise stores [3] - Significant growth was noted in the Northeast, North China, Northwest, and Southwest regions, with a total of 1,443 new stores added [3] Profitability Forecast - The forecast for net profit in 2024 is adjusted to 14.28 billion yuan, down from previous estimates [4] - The projected net profit for 2025 is 17.39 billion yuan, with 2026 expected to reach 21.06 billion yuan [4] - Corresponding P/E ratios are projected at 17, 14, and 12 times for 2024, 2025, and 2026 respectively [4]