Core view
The medical and health service industry of traditional Chinese medicine has a large scale, high growth rate and has not seen the ceiling; The industry is scattered and small, and the competition pattern is not clear; Demand is expanding, and daily health management and "prevention and treatment" are favored; Policy support is expected to usher in a golden period of development
The TCM medical service industry has a long history, large scale and high growth rate. Traditional Chinese medicine has developed for more than 2000 years since its emergence. It is an important sub track of the medical and health service industry; In 2019, the market scale of China's traditional Chinese medicine health industry will be 920 billion yuan, which is expected to reach 2.97 trillion yuan in 2030 and cagr11.5 billion yuan in 20192030 3%。 The scale of TCM diagnosis and treatment service track is about 290 billion yuan in 2019 and is expected to reach 1.8 trillion yuan in 2030, accounting for 17% of CAGR. Traditional Chinese medicine hospitals are the main part of traditional Chinese medicine hospitals. In 2020, there were 4426 hospitals, with 1.1274 million employees, 72.3% utilization rate of hospital beds and 518 million diagnosis and treatment people, which are concentrated in East China. The development of traditional Chinese medicine hospitals in municipal areas is better than that in county-level areas, and the volume is larger.
There are many and scattered players in the track, and the competition pattern is uncertain. In 2020, the market scale of private TCM diagnosis and treatment service providers accounts for 42% of the whole TCM medical service industry. The players in the track are weak and scattered, many private operations and a complex number (nearly 60000) have not formed a brand effect, so the industry needs to be reshuffled.
The aging population and the prevalence of chronic diseases are superimposed on unhealthy lifestyles, and the demand for daily health management is expanding. In 2020, China's population aged 65 and over will reach 190 million, accounting for 13.5% of the total population, and the irreversible trend of population aging will appear; The incidence rate of chronic diseases is 54%, and the demand for chronic diseases and disease prevention is expanding. The Chinese medicine has continued to thoroughly and thoroughly regulate the patients with its unique periodicity, treatment and individuation. By providing special personalized Chinese medicine prescriptions through the unique means of seeing and hearing, 65 Chinese medicine practitioners have become the new trend of health management.
Policy support, industry east wind has arrived. The state has long planned the development of traditional Chinese medicine. On December 30, 2021, the State Medical Insurance Bureau and the administration of traditional Chinese Medicine issued guidance on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine, providing clear support for the development of traditional Chinese medicine industry, such as expanding the payment scope of traditional Chinese medicine medical insurance, improving the price management system of traditional Chinese medicine services Improve the payment policy suitable for the characteristics of traditional Chinese medicine (traditional Chinese medicine hospitals do not implement DRG temporarily); It is expected that the state will encourage the development of traditional Chinese medicine industry in the future, and relevant policies will be implemented step by step. The policy risk of traditional Chinese medicine industry has been clearly reduced.
Gushengtang is the representative target of TCM diagnosis and treatment services. We believe that the company has strong business integration, extension and endogenous management capabilities. In the future, it is expected to continue to expand the coverage area of offline business, optimize the online platform, and finally build the largest intelligent, product-based and platform-based new TCM system in China. Based on the exchange rate of HK $9.3 billion (202203-02) and 0.81, the total revenue of the company in 2022 / 2023 is expected to reach RMB 1.68/2.19 billion, the adjusted net profit is expected to reach RMB 220 / 310 million, and the adjusted P / E is 34 / 24x. We are optimistic about the company's strong business integration ability, fine operation and his system to further empower the company and give a "buy rating".
