Investment Rating - The report gives a "Buy" rating for Gushengtang (02273 HK) with a 2025 PE of 25x, considering the company's scarcity in the sector and high growth potential [5][29] Core Views - Gushengtang is a leading Chinese medicine healthcare service provider with a mature business model and rapid expansion [5] - The company's revenue is expected to grow at a CAGR of 36 1% from 2024 to 2026, driven by increasing patient visits and average spending per customer [4][29] - Gushengtang's membership system has significantly improved customer retention and spending, with members spending approximately 1000 RMB more than non-members [15] Business Overview - Gushengtang operates in two main segments: healthcare solutions (accounting for over 90% of revenue) and healthcare product sales [1][4] - The company has expanded to 71 offline medical institutions across 19 cities as of June 2024, with 70% of locations acquired through M&A [47][49] - Gushengtang has developed 10 proprietary hospital preparations for conditions such as rhinitis, hair loss, and chronic pharyngitis [49] Expansion Strategy - The company plans to add 19 15 15 new stores in 2024 2025 2026 respectively, accelerating its expansion pace compared to 2021-2023 [2] - Gushengtang has established a three-tier talent development system, collaborating with over 100 renowned Chinese medicine experts and training more than 39 000 licensed Chinese medicine practitioners [97] Financial Performance - Revenue grew from 726 million RMB in 2018 to 2 323 billion RMB in 2023, with a CAGR of 26 18% [59] - Net profit turned positive in 2022, reaching 252 million RMB in 2023, representing a 37 6% YoY increase [59] - The company's customer retention rate increased from 50% in 2018 to 62 8% in 2022, driving patient visits to reach 5 46 million in 2024 [3] Industry Analysis - The Chinese traditional medicine diagnosis and treatment market reached 292 billion RMB in 2019 and is expected to grow to 1 8 trillion RMB by 2030 [75] - Private traditional Chinese medicine hospitals have grown faster than public ones, with a 17 6% CAGR in institutions and 11 5% CAGR in patient visits from 2010 to 2021 [80] - The market share of private TCM service providers is projected to increase from 22 3% in 2019 to 51 4% in 2030 [81] Valuation - Comparable companies in the healthcare services sector have an average 2025 PE of 26x [5] - Gushengtang's 2024-2026 revenue is forecasted to be 3 02 4 09 5 39 billion RMB, with net profit of 301 412 557 million RMB respectively [29] - The company's EPS is expected to grow from 1 23 RMB in 2024 to 2 29 RMB in 2026 [29]
固生堂：行业空间广阔，商业模式优秀