Core Insights - The company has reported significant progress in its new retail strategy, particularly through the "Ten Thousand Store Franchise" initiative, which has contributed to a robust growth in sales and store expansion [1] Group 1: New Retail Strategy - The "Ten Thousand Store Franchise" strategy has led to the establishment of 33,275 direct-operated and franchised pharmacies nationwide by the end of Q3 2025 [1] - Sales revenue from franchise pharmacies reached 5.402 billion yuan, marking a year-on-year increase of 43.40% [1] - The company has expanded its supplier network to over 800 brand suppliers, enhancing its supply chain capabilities [1] Group 2: C-end Business and Services - Revenue from C-end business amounted to 2.235 billion yuan [1] - The company has over 6,800 qualified professional pharmacies, with its own pharmacies handling 429 million yuan in prescription outflow [1] - Specialized services for 13 chronic disease categories have been provided, serving over one million patients [1] Group 3: O2O Business and Digitalization - The O2O business, facilitated by the "Store Connection" system, has over 7,000 offline pharmacies for drug delivery, achieving sales exceeding 300 million yuan in the first three quarters [1] - The company offers a one-stop service for franchise pharmacies through a "Retail SaaS System + Traceability Code Solution" [1] - The digital platform, "Jiuzhou Ten Thousand Stores," serves all retail pharmacies, enhancing operational efficiency [1]

Financial Performance - In the first three quarters of 2025, the company achieved revenue of 119.33 billion yuan (+5.20% year-on-year) and a net profit attributable to shareholders of 1.98 billion yuan (+16.46%) [1] - For Q3 2025, revenue was 38.22 billion yuan (+5.41%), with a net profit attributable to shareholders of 530 million yuan (+8.46%) [1] - The company's cash flow from operating activities improved, with a net increase of 341 million yuan compared to the same period last year, primarily due to enhanced collection of accounts receivable [1] Strategic Initiatives - The company is deepening its "Three New, Two Transformations" strategy, focusing on new products, new retail, new medical services, and digitalization [2] - The CSO business generated revenue of 14.73 billion yuan in the first three quarters, with pharmaceutical sales of 8.74 billion yuan (+15.26%) [2] - The number of self-operated and franchised pharmacies reached 33,275, with sales revenue from franchise pharmacies at 5.40 billion yuan (+43.40%) [2] - The "Nine Medical Clinics" membership stores reached 3,000, with a target of 10,000 in three years, and over 490 new products introduced in the first three quarters [2] - R&D investment in Q1-Q3 2025 was 229 million yuan, with 1,591 technical personnel, and 34 digital projects implemented [2] Market Position and Valuation - The company maintains a leading position in the out-of-hospital distribution sector, with a projected net profit attributable to shareholders of 2.69 billion yuan, 2.82 billion yuan, and 3.11 billion yuan for 2025-2027, corresponding to a PE ratio of 10, 9, and 8 times [3] - The company is rated as a "Buy" due to its improving cash flow and market leadership [3] Real Estate Securities - The public REIT "Jiuzhoutong R" was successfully listed in February 2025, raising 1.16 billion yuan with a subscription multiple of 1,192 times [2] - The closing price of the Huatai Jiuzhoutong Medical REIT (508084) increased by 43.28% compared to the benchmark price, with a maximum increase of 51.81% during the period [2]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has shown improvement in cash flow and continues to advance its "Three New and Two Transformations" strategy [8] - In the first half of 2025, the company achieved a revenue of 81.106 billion yuan, representing a year-on-year increase of 5.10%, and a net profit attributable to shareholders of 1.446 billion yuan, up 19.70% year-on-year [8] - The company successfully issued public REITs for pharmaceutical warehousing and logistics, contributing a net profit of 438 million yuan [8] - The report adjusts the net profit forecasts for 2025-2027 to 2.694 billion yuan, 2.818 billion yuan, and 3.108 billion yuan respectively, corresponding to a PE ratio of 10, 9, and 8 times [8] Financial Performance Summary - Total revenue forecast for 2023A is 150.14 billion yuan, with a projected growth of 6.92% [1] - The net profit attributable to shareholders for 2023A is forecasted at 2.174 billion yuan, with a year-on-year growth of 4.27% [1] - The latest diluted EPS for 2023A is estimated at 0.43 yuan per share [1] - The company’s operating cash flow is expected to increase significantly, with a net cash flow from operating activities of 6.75 billion yuan in 2025E [9]

Group 1 - The core viewpoint of the news is that Jiuzhoutong is successfully implementing its new retail strategy, which focuses on a comprehensive online and offline service system aimed at end consumers [1] - As of now, Jiuzhoutong has nearly 30,000 franchise pharmacies, with new retail revenue expected to reach nearly 3 billion yuan in 2024 [1] - The company reported a rapid growth in sales revenue from franchise pharmacies, reaching 5.392 billion yuan in 2024, a year-on-year increase of 54.94% [1] Group 2 - In 2024, Jiuzhoutong achieved a revenue of 151.81 billion yuan and a net profit attributable to shareholders of 2.507 billion yuan, with a year-on-year revenue growth of 2.58% after excluding seasonal disease impacts [2] - The first quarter of 2025 saw Jiuzhoutong generate a revenue of 42.016 billion yuan, a 3.82% increase compared to the same period last year, with a net profit of approximately 970 million yuan, reflecting an 80.38% year-on-year growth [2] - The company’s non-recurring net profit for 2024 was 1.814 billion yuan, showing a year-on-year increase of 14.89% [2]