Sealand Securities adjusted its earnings forecast for GUSHENGTANG (02273), projecting revenues of RMB 3.27 billion, RMB 3.94 billion, and RMB 4.77 billion for 2025–2027, representing year-on-year growth of 8%, 21%, and 21%, respectively. Net profit attributable to shareholders is expected to reach RMB 415 million, RMB 529 million, and RMB 661 million, with growth rates of 35%, 27%, and 25%, corresponding to P/E ratios of 16x, 12x, and 10x. Adjusted net profit is forecasted at RMB 460 million, RMB 555 million, and RMB 671 million, rising 15%, 21%, and 21% year-on-year. As a leader in traditional Chinese medicine (TCM) healthcare services, the company retains its "Buy" rating.
Key highlights include: - **High shareholder returns**: As of November 10, 2025, interim dividends and share buybacks totaled HKD 420 million. The company distributed an interim dividend of HKD 0.35 per share, amounting to HKD 82.61 million. It also repurchased 11.05 million shares (4.68% of total shares) for HKD 339 million. On November 6, the board approved an additional HKD 300 million buyback plan. - **Patient volume growth**: In Q3 2025, GUSHENGTANG recorded 1.607 million patient visits, up 8.2% year-on-year and sequentially, following 1.21 million and 1.537 million visits in Q1 and Q2, respectively.
**Recent business expansion**: - **Domestic expansion**: Since July 2025, the company added four new branches—Shenzhen Tianyuan Hospital, Tianjin Hexi Branch, Nanjing Gulou Branch, and Fuzhou Taijiang Branch—covering areas of 5,000㎡, 2,000㎡, 1,300㎡, and 800㎡, respectively. These expansions strengthen its presence in Shenzhen, mark its entry into Tianjin, and deepen coverage in Nanjing and Fuzhou. - **Overseas breakthrough**: GUSHENGTANG formed a strategic partnership with Singapore’s digital healthcare platform 1doc, establishing a joint venture (70% owned by GUSHENGTANG) to operate dedicated TCM clinics within 1doc’s network. 1doc, a subsidiary of IHG (IAPPS Health Group), operates 9 clinics and 21 affiliated clinics in Singapore, enabling rapid scaling and integrated TCM-Western medicine services.
The company is advancing TCM globalization through clinic expansion, technology exports, and product overseas registration. It aims to establish 30 clinics in Singapore by end-2026. On October 22, it launched "TCM AI Avatars" in Singapore to enhance AI clinical applications and support overseas TCM practitioners. Its first certified overseas product, a hair-care granule, has been approved by Singapore’s Health Sciences Authority, with more formulations planned for international registration.
**Risks**: Slower-than-expected expansion, goodwill impairment, talent attrition, medical incidents, and intensifying industry competition.
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