Jinwu Financial News | According to CMB International Development Research Report, Gushengtang (02273) updated 1Q24 business data. The number of 1Q24 patients was about 1.07 million, an increase of about 42.1% over the previous year. Among them, the number of 1Q24 patients in newly established stores was about 74,000, contributing 9.8% of the total number of patients.
The bank mentioned that in '23, Gushengtang acquired a total of 7 stores and opened 3 new branches. Entering 24 years, the company's store expansion has accelerated markedly. The bank believes that as public recognition of traditional Chinese medicine continues to increase and residents in economically developed regions have strong purchasing power for medical services, Gushengtang will continue to benefit.
The bank continues to be optimistic about Gushengtang's leading position in private traditional Chinese medicine services and development space, and maintains a purchase rating. The target price is HK$71.96. The bank expects Gushengtang's 2024E/25E/26E revenue to increase by 34.8%/32.9%/29.9% year on year, and adjusted net profit to increase 38.2%/36.6%/34.4% year on year. The adjusted PE corresponding to current stock prices is 23.8x/17.5x/13.0x, respectively.