JZJ(SH:605266) INDUSTRIAL SECURITIES·2024-05-09 07:32Investment Rating - The report assigns a "Hold" rating for the company, indicating a stable outlook with potential for growth in the future [14][22]. Core Insights - The company is experiencing growth in its store network, with a total of 5,263 stores as of Q1 2024, reflecting a year-on-year increase of 25.55% [31]. - The company has actively adjusted its product category planning to capture the incremental demand from prescription outflow, with 823 stores qualifying for outpatient coordination as of Q1 2024 [23]. - The company reported a revenue of 90.81 billion yuan in 2023, a year-on-year increase of 20.84%, while the net profit attributable to the parent company was 4.14 billion yuan, up 10.72% year-on-year [26]. Summary by Sections Store Network and Growth - As of Q1 2024, the company has 1,163 new and relatively new stores, accounting for 22.10% of the total, which is expected to contribute positively to future performance as these stores mature [1]. - The company opened 799 new stores in 2023 and 134 in Q1 2024, indicating a strong expansion strategy [1][31]. Financial Performance - In Q1 2024, the company achieved a revenue of 23.14 billion yuan, representing a year-on-year growth of 6.79%, although net profit decreased by 31.51% [26][18]. - The gross profit margin for Q1 2024 was 34.36%, an increase of 1.75 percentage points year-on-year, primarily due to a higher proportion of high-margin private label products [13]. Product Categories and Sales - The company has seen a steady increase in the sales of personal care and convenience products, with revenues growing by 28.68% and 25.65% respectively in Q1 2024 [3]. - The sales of prescription drugs grew significantly, with a year-on-year increase of 42.05% in 2023, indicating strong demand in this segment [29]. Future Outlook - The company has set ambitious performance targets through its stock incentive plan, aiming for net profit growth rates of at least 15%, 36%, and 60% for 2024, 2025, and 2026 respectively [15][22]. - Earnings per share (EPS) forecasts for 2024, 2025, and 2026 are projected at 3.08, 3.65, and 4.30 yuan, respectively, suggesting a positive growth trajectory [14][24].