Gelonghui, September 8th | September 5thCITIC SecuritiesRelease of research report, first coveragePharmacist Gang(9885.HK) and gave it a "buy" rating, expressing optimism about its continued profitability and development prospects.CITIC SecuritiesIn its research report, the securities firm pointed out that Yaoshibang is making a deep presence in the lower-tier market outside of hospitals, from 2020 to 2024.Operating incomeIt grew from 6.06 billion yuan to 17.904 billion yuan, with a compound annual growth rate of 31.1% during the period, demonstrating a clear advantage in scale. Among the self-operated businesses, the top brand and private brand businesses accelerated their growth, driving a simultaneous increase in revenue and gross profit margin. The net spread between the platform's commission rate and subsidy rate continued to widen, and profitability continued to improve. POCT equipment is expected to steadily increase in volume, achieve medical + drug + inspection synergy, and diversified businesses enter the harvest period. In addition, the company's cash flow is relatively good, and the scale of net operating cash flow is expected to gradually increase with the scale of operations. In the first half of 2025, Yaoshibang continued the strong momentum of turning a profit from 2024, achieving operating revenue and attributable to the parent company.Net profitThe figures were RMB 9.843 billion and RMB 78 million respectively, representing year-on-year increases of 11.7% and 258%, in line with market expectations. CITIC Securities believes that Yaoshibang's high-gross business is growing rapidly, and the business has entered the harvest stage. It expects the company to achieve net profit attributable to the parent company of RMB 148 million, RMB 315 million and RMB 512 million in 2025-2027, respectively, representing year-on-year increases of 393.6%, 112.3% and 62.7%, and gives it a "buy" rating for the first time. Following the release of Yaoshibang's interim results, several securities firms updated their research reports and expressed optimism about Yaoshibang. Among them,Cinda SecuritiesIt is believed that the brand's flagship business contributed strong growth momentum, further improving the company's performance.Gross profitstructure;Great Wall SecuritiesThe company believes that its own brand business is showing high growth and is gradually achieving a strategic upgrade from "scale expansion" to "profit improvement". It is expected that the company will achieve net profit attributable to the parent company of RMB 124 million, RMB 379 million and RMB 720 million in 2025-2027, respectively. Both securities firms maintained their "buy" ratings. Since the beginning of this year, Yaoshibang's stock price has risen from HK$5.Pull upIt reached around HK$11, with the largest increase this year exceeding 120%. Recently, Yaoshibang's stock price has remained around HK$10. Some industry insiders analyzed that the company is in a period of shareholding exchange between old and new shareholders, or may exhibit a period of fluctuation and consolidation. Yaoshibang's fundamentals are positive, its long-term logic is solid, and its profitability improved significantly in the first half of the year. After completing the chip exchange and stabilization and consolidation, it may have the opportunity to break through upwards.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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