Investment Rating - The report initiates coverage with a "Buy" rating for the company, considering its supply chain advantages, self-operated brand strengths, and the ability to continuously attract third-party merchants and expand O2O services, which are expected to drive steady growth in performance [6][7]. Core Insights - The company has transitioned from a pharmaceutical e-commerce platform to a comprehensive healthcare service provider, offering health product sales, medical services, and smart healthcare solutions, thereby achieving an online closed loop of medical services [14][17]. - The company's self-operated business is the core driver of its performance, with a significant revenue contribution from pharmaceutical and health product sales, which accounted for 84% of total revenue in 2024, growing by 6.9% year-on-year [6][17]. - The online healthcare market is expected to see accelerated penetration, particularly in non-pharmaceutical categories like nutritional supplements and home medical devices, while the pharmaceutical market's online penetration is anticipated to increase due to changing consumer behaviors and regulatory support [6][39]. Financial Data and Profit Forecast - The company forecasts revenues of 63.65 billion, 69.65 billion, and 76.55 billion CNY for 2025, 2026, and 2027 respectively, with net profits of 4.52 billion, 5.04 billion, and 5.79 billion CNY for the same years [6][7]. - The projected earnings per share (EPS) are expected to be 1.41, 1.58, and 1.81 CNY for 2025, 2026, and 2027 respectively, with a net asset return rate gradually increasing to 8.21% by 2027 [6][7]. Market Dynamics - The competitive landscape in the online healthcare sector is expected to stabilize by 2025, with the company leveraging its supply chain, service ecosystem, and AI capabilities to create competitive barriers [6][44]. - The report highlights that the online healthcare service market is still in its early stages, with significant growth potential driven by increased health awareness and the demand for personalized healthcare solutions [41][44]. Key Assumptions - The company anticipates continued growth in pharmaceutical and health product sales through deep collaboration with brand partners, supported by its supply chain advantages [8]. - The platform and advertising services are expected to grow rapidly, with revenue projections of 10.92 billion, 12.38 billion, and 14.04 billion CNY for 2025, 2026, and 2027 respectively [8].

Core Insights - Douyin Xiaoshida is an instant retail service by Douyin, focusing on "delivery within approximately 1 hour after ordering" to meet users' immediate shopping needs [1] - The service was piloted in Shenzhen in August 2022 and expanded to major cities like Beijing, Shanghai, Guangzhou, and Shenzhen in 2023, with plans to open full access to all e-commerce influencers by March 2025 [1] - The service covers a radius of 5-10 kilometers from the user, offering categories such as fresh produce, food, daily necessities, 3C accessories, flowers, beauty products, and over-the-counter drugs [1] Service Model - Merchant Model: Merchants must provide business licenses and relevant operating qualifications, set up their stores, list products, and manage orders and delivery [2] - Influencer Sales: Influencers with complete e-commerce permissions can automatically activate their accounts and promote products through short videos, images, and live streams [2] - Delivery relies on third-party teams, with a system that matches nearby delivery personnel, typically achieving delivery within 1 hour, although delays may occur during peak times or adverse weather [2] Onboarding Process - Preparation: Required documents include business licenses, legal representative ID, store logo, and product photos [5] - Store Creation: Merchants create a store on the platform and fill in necessary information [5] - Submission and Review: Submitted information is reviewed, typically taking 3-5 business days for results [5] - Information Completion: After approval, merchants can further refine store details [5] - Product Upload: Merchants upload product information, including names, prices, descriptions, and inventory [5] - Shipping Fee Setting: Merchants set shipping fees based on actual conditions [5] - Product Launch: After completing the previous steps, products are published on the platform [5] - Marketing Operations: Merchants can then engage in marketing to attract more users [5]