Yixintang Pharmaceutical (SZ:002727)2022-12-07 09:38Company Overview - Yunnan Hongxiang Yixintang Pharmaceutical (Group) Co., Ltd. was established on November 8, 2000, and transformed into a joint-stock company on May 10, 2009 [1]. Store Distribution - As of September 30, 2014, the company operates 2,480 directly-operated stores, with the majority located in Yunnan (1,915), followed by Guangxi (254), Sichuan (141), Chongqing (38), Shanxi (42), and Guizhou (90) [1]. Sales Growth of New Stores - New stores typically achieve profitability within 12 months and can recover initial losses by the 26th month. The average revenue per store continues to grow over time, although the growth rate decreases after six years of operation [1]. Revenue Growth Factors - The company attributes its revenue growth to strong channel advantages, sales execution, and marketing capabilities. Collaborations with suppliers enhance gross margins through various distribution models [2]. Rural Market Expansion - Increased government investment in rural healthcare is expected to boost personal healthcare spending among rural populations, which currently lags behind urban areas. This trend is anticipated to benefit the company as it expands its presence in rural markets [3]. Store Performance in Rural Areas - The number of rural stores has increased significantly, with sales and gross profits showing continuous growth post-healthcare reforms. The following table illustrates the growth in rural store numbers and retail revenue: | Year | Rural Store Count | Retail Revenue (万元) | |------------|-------------------|-----------------------| | 2011 | 160 | 13,276.25 | | 2012 | 277 | 19,396.75 | | 2013 | 383 | 28,545.78 | | 2014 (Jan-Sep) | 390 | 28,529.17 | - The company is focusing on expanding in third and fourth-tier cities and rural areas, which are seen as high-potential markets due to rising consumer incomes and health spending [4].