Industrial Securities Co.,Ltd. has released a research report, adjusting its profit forecasts for Gushengtang (ASX: 02273). The firm now projects the company's net profit attributable to shareholders for 2026-2028 to be RMB 410 million, RMB 477 million, and RMB 553 million, representing year-on-year growth rates of 16.34%, 16.16%, and 15.99% respectively. Based on the closing price on July 10, 2026, this translates to a price-to-earnings ratio of 15.08, 12.98, and 11.19 times for those years. The 'Buy' rating has been maintained.
Acquisition Enhances Network
On July 5, 2026, the company announced that its subsidiary, Beijing Gushengtang Health Management Co., Ltd., had signed agreements to acquire controlling stakes in two Beijing-based medical institutions: Shajinghe Integrated Traditional Chinese and Western Medicine Hospital and Beijing Hongyang Traditional Chinese Medicine Hospital Co., Ltd. Following the completion of these acquisitions, both hospitals will become subsidiaries and be consolidated into the group's financial statements. Located in Beijing's Changping District, these acquisitions are expected to help the company expand its offline medical service coverage in the Beijing area, strengthen its ability to integrate regional medical resources, and increase its market share in the capital. Furthermore, the acquisitions are anticipated to foster synergies between the new facilities and the existing network of offline clinics and online medical platforms, thereby enhancing the overall operational efficiency of the healthcare service system.
Strategic Expansion Continues
The company is consistently expanding its offline medical institution coverage through mergers and acquisitions. In 2025, it strategically completed the acquisition of several institutions including Future TCM Hospital, Jingkang TCM Hospital, Guangren Hospital, Tongkang TCM Hospital, and Ping'an Comprehensive Clinic. These moves have enhanced its TCM service capabilities and resource integration. In June 2026, the company announced the acquisition of 100% equity in Sante Clinics and Sante TCM, as well as a 90% stake in Tianjin Bainian Renyitang. Sante Clinics and Sante TCM primarily provide maternal, prenatal, postnatal, infant, and family health services along with retail services in Singapore, which will strengthen the company's operational capabilities in that market. As this external expansion continues, the company is poised to further refine its national and international TCM healthcare service network and improve its platform-based operational capacity.
Sustained Growth and Digital Progress
The company disclosed its operational performance for the first quarter of 2026 on April 21, 2026. In Q1 2026, the number of patient visits reached approximately 1.392 million, a year-on-year increase of about 15.0%, indicating a continuation of stable growth. Concurrently, the company is advancing the application of digital and AI technologies in medical service scenarios. It launched its first "National Physician AI Avatar" in June 2025, and by December 2025, 13 such avatars were operational. These AI tools assist in improving the efficiency of diagnosis and treatment services and optimizing the patient experience. With the ongoing expansion of its medical service network and the continuous enhancement of its digital capabilities, the company is well-positioned to further improve patient reach and operational efficiency.
The report also notes potential risks, including changes in regulatory policies, market and economic conditions, slower-than-expected pace of clinic expansion and M&A activities, and risks associated with AI implementation, such as performance falling short of expectations or costs exceeding projections.
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