Yifeng Pharmary(603939) 华兴证券·2024-05-21 05:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 57.48, indicating a potential upside of 27% from the current price of RMB 45.40 [1][2][15]. Core Insights - The company is expected to achieve a revenue and net profit CAGR of 26% and 33% respectively from 2023 to 2026, driven by robust store growth and the trend of hospital prescription outflow [4][5]. - The company added 3,196 stores in 2023, with a total of 13,920 stores as of Q1 2024, and is projected to reach 23,774 stores by 2026, reflecting a CAGR of 22% in store count [6][11]. - The company’s 2023 revenue was RMB 22.59 billion, a 14% increase year-on-year, with a net profit of RMB 1.41 billion, up 12% [5][20]. Financial Performance - The company reported a gross margin of 38.2% in 2023, slightly down from the previous year, attributed to an increase in low-margin wholesale revenue [5][8]. - The forecast for 2024E revenue is RMB 28.53 billion, with a gross profit of RMB 11.22 billion and a net profit of RMB 1.99 billion [10][12]. - The report indicates a downward adjustment in EPS for 2024 and 2025 by 28% and 27% respectively, due to increased share capital from stock dividends [11][14]. Market Comparison - The company’s P/E ratio for 2024 is projected at 29, which is above the industry average of 15, suggesting a premium valuation due to expected high growth rates [15][17]. - Compared to peers, the company has a higher market capitalization of RMB 45.88 billion and a lower EPS than some competitors, indicating competitive positioning in the market [17]. Store Expansion and Strategy - The company is leveraging both online and offline channels to capture hospital prescription flows, with a significant number of stores qualifying for medical insurance [5][6]. - The report highlights the importance of acquisitions for expansion, with a focus on maintaining growth in a competitive retail pharmacy environment [18]. Future Projections - Revenue projections for 2024E, 2025E, and 2026E are RMB 28.53 billion, RMB 35.75 billion, and RMB 44.88 billion respectively, reflecting a strong growth trajectory [12][20]. - The company is expected to maintain a healthy net profit margin, with projections of 7.0% for 2024E and 7.4% for 2026E [21].