Yifeng Pharmary(SH:603939) Haitong Securities·2024-05-30 01:01Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The company reported a revenue of 22.588 billion yuan in 2023, representing a year-on-year growth of 13.59%, and a net profit attributable to shareholders of 1.412 billion yuan, up 11.90% year-on-year [5][6] - The company continues to expand its store network, with a total of 13,920 stores by the end of Q1 2024, including 3,157 franchise stores [5] - The company is expected to maintain a rapid expansion pace, planning to add 4,000 new stores in 2024 [5] - The retail business revenue reached 20.185 billion yuan in 2023, growing by 12.00%, while the pharmaceutical wholesale business saw a significant increase of 39.23% to 1.892 billion yuan [5][6] - The company has demonstrated strong operational efficiency, with a continuous optimization of expense ratios [5] Summary by Sections Financial Performance - In Q4 2023, the company achieved a revenue of 6.7 billion yuan, a 2.47% increase year-on-year, but the net profit decreased by 5.81% to 413 million yuan [5] - For Q1 2024, the revenue was 5.971 billion yuan, reflecting a 13.39% year-on-year growth, with a net profit of 407 million yuan, up 20.89% [5] - The company’s revenue forecast for 2024 is 27.623 billion yuan, with a projected net profit of 1.772 billion yuan, indicating a growth rate of 25.5% [6][9] Store Expansion Strategy - The company follows a "regional focus + steady expansion" strategy, utilizing new openings, acquisitions, and franchising to drive growth [5] - In 2023, the company added 3,196 new stores, including 1,613 self-built, 559 acquired, and 1,024 franchised stores [5] Market Position and Policy Impact - The company is positioned to benefit from the ongoing outpatient coordination policies, with over 4,200 stores participating in such programs by the end of 2023 [5] - The company’s operational advantages in store management and drug supply are expected to enhance its performance as more stores are integrated into outpatient coordination [5] Profitability and Cost Management - The company’s gross profit margin for 2023 was 38.21%, with a slight decrease of 1.32 percentage points year-on-year [5][9] - The expense ratio for the company improved, with a total expense ratio of 29.08%, down 0.65 percentage points from the previous year [5] Valuation and Future Outlook - The company is expected to achieve net profits of 1.772 billion yuan, 2.169 billion yuan, and 2.665 billion yuan for 2024, 2025, and 2026, respectively, with growth rates of 25.5%, 22.4%, and 22.8% [6][9] - The company is assigned a valuation premium, with a target price range of 43.75 to 52.50 yuan based on a price-to-earnings ratio of 25-30 times for 2024 [5][9]