29/03/2020

Yifeng Pharmacy (603939) Research Report: “New Retail + Heart Retail” Strategy Leads the Industry
Recent situation of the company We studied the company last week, communicated with the related parties in the first half of the year and the company’s development plan. We believe that the company is leading the industry strategically. Comment on the strong integration of mergers and acquisitions, as a follow-up for continued expansion and necessary foundation.In November 2018, the company completed the completion of the largest merger and acquisition project since its establishment-Hebei Xinxing Pharmacy, and comprehensively integrated cultural, commercial, operational, human and financial aspects. 1H2019, emerging pharmacy income5.770,000 yuan, net profit 46.7 million yuan, net interest rate 8.09%, an increase of 2 from the first half of 2018.35ppt, benefiting from the company’s outstanding integration capabilities, lays the foundation for future acquisitions, expansions and expansions, and helps the company quickly increase its industry share. Excellent strategy + professional services to enhance customer credibility.The company continues to promote the strategy of high-quality products, strengthen cooperation with brand industrial enterprises, improve internal boutiques including private brands and co-builders, and provide customers with reliable quality, improved revenue, 天津夜网 and cost-effective products, and improve customer trust.At the same time, the company has continuously strengthened its staff’s professional service training, and made its customer repurchase rate gradually reach performance evaluation, ensuring that customer stickiness is further enhanced. Leading the industry, for the first time proposed “new retail + heart retail”.With the rapid expansion of major Internet leaders into the pharmaceutical industry, the degree of integration between online and offline is getting higher and higher. We believe that the pharmaceutical retail industry will continue to break through the constraints of time and space. User-centric professional service capabilities will become the core of future physical pharmacies.Competitiveness.At present, the pharmaceutical retail industry is generally guided by “commodity sales”, which is easy to reduce the customer experience. The company launched the 佛山桑拿网 first “new retail + heart retail” strategic upgrade. “New retail” is intended to reorganize the people’s goods yard around healthy and sensitive people.The channel integrates the company’s offline stores for all-scenario resource integration; “Heart Retail” is intended to be customer-centric and complement new retail, continuously build customer trust, provide stronger full life cycle health management, and take the lead in the industry with a forward-looking strategy. Estimates suggest that we maintain target 1 of our 2019/2020 earnings forecast.58/2.10 yuan, an increase of 42.71% / 33.18%.The company currently expects to correspond to 49 / 37x P / E in 2019/2020.We maintain the company’s outperform rating and maintain the target price of 85 yuan, corresponding to 54/40 times P / E in 2019/2020, which is 9 compared to the current.79% upside. Risk manpower and rent costs are rising; new models are challenging; talent introduction cannot keep up with store expansion.