LBX(SH:603883)2024-08-09 15:50Summary of Conference Call Records Company and Industry Overview - The company discussed its franchise business development, emphasizing its role as a "second curve" for long-term growth, focusing on "win-win and altruism" to support franchisees in enhancing store operations [1] - The company operates in the pharmaceutical retail industry, facing stricter regulatory environments and increased market price transparency, which poses challenges for small chain and independent pharmacies [1][2] Key Points and Arguments Franchise Business Development - The total number of franchise stores has exceeded 5,000, with annual distribution revenue growing from nearly 600 million to 2.2 billion from 2019 to 2023, reflecting a compound annual growth rate of approximately 38.38% [1] - The company employs a "seven unification" strategy to ensure high standards in management and operations, which includes unified branding, management systems, training, procurement, financial management, and pharmaceutical service standards [1] Industry Policy Impact - The tightening of regulations and increased price transparency is expected to benefit larger chain pharmacies with stronger compliance, management, product selection, and service capabilities, leading to accelerated market concentration [2] - The company has established a strict compliance control system and enhanced process management through systematic and digital means [2][3] Market Expansion and Downstream Strategy - The company is focusing on expanding its store network in 11 advantageous provinces and actively developing lower-tier markets, which is seen as both a strategic necessity and a social responsibility [3] - As of Q1 2024, 76% of the company's stores are located in prefecture-level cities and below, with 78% of new stores in 2023 situated in these areas [3] Chronic Disease Management and Health Consultation Innovations - The company established a "Chronic Disease and Health Management Center" in 2018, providing personalized health management services for chronic disease members [4] - By Q1 2024, the company has built a database for over 14 million individuals, conducted over 70 million self-tests, and held 24,000 educational sessions [4] Brand Development - The company is actively engaging in brand activities and content creation to enhance brand visibility and user engagement, producing over 60 health science and brand communication pieces in Q1 [5] - Brand activities are centered around user needs, with campaigns like "Family Flavor, Healthy Year" and "Painless China, Beautiful Occurrence" aimed at increasing brand loyalty [5] Additional Important Content - The company leverages its strong brand influence and advanced digital capabilities to empower franchise stores, ensuring quality and efficiency in operations [1] - The focus on chronic disease management reflects the growing demand due to an aging population and increasing chronic disease prevalence [4]