Gushengtang (02273) 2024 Full year performance: continuous high growth in revenue scale, significant results from innovative layout.

On March 31, GUSHENGTANG (02273) officially released its annual performance announcement for the year 2024. The report shows that the company's annual operating income exceeded 3.02 billion yuan, a year-on-year increase of 30.1%; adjusted net profit reached 400 million yuan, a year-on-year increase of 31.4%. Adjusted profit without considering exchange gains and losses was 407 million yuan, an increase of 39.8% compared to 2.91 billion yuan in 2023. At the end of 2024, it is planned to increase the dividend per share by 0.41 Hong Kong dollars, with a previous interim dividend per share of 0.13 Hong Kong dollars, and a total estimated dividend of 119 million yuan for the year. These series of measures reflect the company's high regard for shareholder interests. Domestic encryption and overseas breakthroughs dual-drive In 2024, GUSHENGTANG continued to promote the strategy of "local encryption + new city expansion + overseas layout", adding 21 new branch clinics throughout the year. Among them, 4 branch clinics were self-built (Shanghai Putuo branch, Wenzhou South Building branch, Wuxi Shangmadun branch, Suzhou Wujiang branch), and 17 branch clinics were acquired, such as Ningbo Guyuantang, Hangzhou Yongchuntang, Shanghai Shangshantang, successfully expanding to five domestic and foreign cities including Singapore, Changsha, Changshu, Xuzhou, and Jiangyin. The total number of institutions increased to 79, with service networks covering the entire country and radiating to Southeast Asia. While the offline branch clinics grew rapidly, the stability of existing stores laid the foundation for development. The revenue from stores in the years before 2023 increased from 2.03 billion yuan to 2.59 billion yuan, a nearly 28% year-on-year increase. Membership system and young customer group create value In 2024, the number of outpatient visits reached 5.41 million, a year-on-year increase of 25.9%; the customer retention rate increased from 65.16% to 67.09%, and the average annual number of visits per person increased from 3.58 to 3.90. In 2024, GUSHENGTANG gained more long-term trust from users. Membership revenue increased from 961 million yuan in 2023 to 1.269 billion yuan, a year-on-year increase of 32%; the number of member visits increased from 1.568 million to 2.131 million, a year-on-year increase of 36%; the number of consumers increased from 364,500 to 459,500, a year-on-year increase of 26%. The average annual consumption amount and number of visits by members increased synchronously, significantly enhancing consumption stickiness. Using Guangzhou as an example, the number of members approached 120,000 in 2024, a year-on-year increase of over 25%, with membership revenue accounting for over 65% (a nearly 5% increase year-on-year). In terms of business structure, self-paid nurse treatment income increased by over 50% year-on-year, with users under 25 years old contributing to nearly 25% of performance. The flourishing consumption of young people provides additional impetus for regional income and profit growth. Medical resources and innovation driving barriers In 2024, 8 new medical collaborative units were added (such as Heilongjiang University of Traditional Chinese Medicine, Shandong University of Traditional Chinese Medicine, Jiangyin City Chinese Medicine Hospital, etc.), with a total of 28 cooperative units. The number of cooperative doctors reached 40,242, with an addition of 3,018; there were 6,052 offline cooperative doctors, including 502 more senior titled doctors, accounting for 47%. The company's own medical team continued to improve. Among the nearly 800 own doctors, 43 achieved title promotions (including 5 promoted to associate chief physicians). Own doctors have abundant frontline clinical opportunities, and can also enter the studio of famous doctors for learning, without worrying about promotion and other issues. From 2024 to February 2025, 6 new in-house preparations were added (including Gangjuqingying granules, Xiangtao granules, Shenqi guben paste, Jianspenyiqi sangjie granules, Yinxueguijing paste, Wumeiguifaherbulage), with a total of 13 completed filings. In 2024, GUSHENGTANG completed the full chain from preparation research and development to regional allocation and compliance use. In 2024, the sales of in-house preparations in the Guangzhou region alone reached millions of yuan, with an expected explosive volume growth in 2025. High-quality data and AI promoting development In 2024, GUSHENGTANG actively explored big data model training based on massive, real, and high-quality data. In the short term, AI technology can assist grassroots doctors and young doctors in quickly grasping the thinking of famous doctors, shortening the accumulation period of clinical experience, and alleviating the scarcity of high-quality medical resources. In the long run, digitalization of doctors can achieve AI digital inheritance of the experience and abilities of famous doctors and experts. Operating cash and financial status stabilize the foundation As of the end of 2024, GUSHENGTANG's net cash flow from operating activities was 450 million yuan, with a bank credit limit of about 1 billion yuan and cash reserves of 1.2 billion yuan. The company places importance on returning value to investors, actively implementing dividend policies and share repurchases. In 2024, a total of 312 million yuan was used for repurchasing 9.199 million shares (canceling 2.88 million shares), and a final dividend of 89.963 million yuan is planned to be distributed (subject to approval at the shareholders' meeting). 2025: Actively and steadily coexist In 2025, GUSHENGTANG will focus on the training of AI avatars based on high-quality medical resources and large-scale offline service scenes, to enhance the supply capacity of high-quality medical resources and make good TCM available to everyone. At the same time, actively using TCM AI to empower the membership system to further enhance member user stickiness. Offline, GUSHENGTANG plans to add 15-20 branch clinics, increase encryption in existing city stores, and expand to 2-3 new cities. Overseas, GUSHENGTANG plans to explore new drug transformation through in-house preparations in Singapore. Focusing on the reality of weak internal doctors in overseas TCM, with strong demand yet to be fully released, using TCM AI to enhance the service capabilities of overseas doctors. In 2025, GUSHENGTANG will uphold the tradition of "conscientious doctors, reassuring medicine", maintain a positive and steady expansion, and make TCM a part of mainstream medicine worldwide.