Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 57 HKD, while the current price is 43.25 HKD [2][3]. Core Insights - The company is making its first entry into the Hunan market through the acquisition of 100% equity in Hunan Mingyuantang for 18 million RMB, which will accelerate its expansion [2][3]. - As of June 2, 2024, the company has completed 11 new branches through self-construction and acquisitions, increasing the total number of branches to 69 [3]. - The company has also made strides in international expansion by acquiring Baozhongtang in Singapore and has opened new branches in Shanghai and Suzhou [3]. - The company has established 26 medical alliance cooperation units, enhancing its medical team and collaboration with educational institutions [3]. Financial Projections - The adjusted net profit for 2024-2026 is projected to be 418 million, 558 million, and 765 million RMB, representing year-on-year growth of 37%, 34%, and 37% respectively [3][4]. - The total revenue is expected to grow from 2,327 million RMB in 2023 to 5,571 million RMB in 2026, with a compound annual growth rate of approximately 32.8% [4][9]. - The price-to-earnings (PE) ratio is projected to decrease from 38.5 in 2023 to 12.6 by 2026, indicating an expected increase in profitability [4][9]. Valuation - The report assigns a target PE of 30 times the adjusted net profit for 2024, leading to a target market capitalization of 14 billion HKD [3].
固生堂：重大事项点评：首次进军湖南市场，加速扩张