CISI FIN released a research report adjusting profit forecasts based on business operations, projecting GUSHENGTANG's (02273) revenue for 2025-2027 at RMB 3.407 billion, RMB 4.106 billion, and RMB 4.908 billion respectively, representing year-on-year growth of 12.74%, 20.50%, and 19.55%. Net profit attributable to shareholders is expected to reach RMB 400 million, RMB 507 million, and RMB 631 million, with year-on-year growth of 30.43%, 26.63%, and 24.59% respectively. The firm maintains its "Buy" rating.
As of June 30, 2025, the company owned and operated 83 medical institutions, representing a net addition of 5 facilities compared to December 31, 2024. In terms of customer metrics, the first half of 2025 saw 453,000 new customers, up 7.77% year-on-year. Total patient visits reached 2.747 million, up 15.27% year-on-year, with average spending per visit of RMB 544. Member visits totaled 1.08 million, up 15.14% year-on-year, while member retention rates remained relatively stable.
**Steady H1 2025 Performance Meets Expectations**
In the first half of 2025, the company achieved revenue of RMB 1.495 billion, up 9.52% year-on-year, and net profit attributable to shareholders of RMB 152 million, up 41.90% year-on-year, demonstrating steady revenue growth and significantly improved profitability. The overall gross margin for H1 2025 was 30.63%, up 1.23 percentage points year-on-year. Net margin attributable to shareholders was 10.14%, up 2.32 percentage points year-on-year. Sales expense ratio was 11.85%, up 0.12 percentage points year-on-year, while administrative expense ratio was 6.30%, down 1.78 percentage points year-on-year. The company declared an interim dividend of HK$0.35 per share, totaling approximately RMB 76 million, representing about 49.96% of H1 2025 net profit attributable to shareholders.
**National Doctor AI Avatar Launch Enhances Quality Traditional Chinese Medicine Service Supply**
In June 2025, the company launched its first "National Doctor AI Avatar," and by August had released 10 major "National Doctor AI Avatars" covering 8 core TCM specialty areas including oncology, dermatology, gastroenterology, otolaryngology, andrology, psychology and sleep medicine, classical prescription medicine, and orthopedics. Through AI-empowered traditional Chinese medicine, the initiative increases quality TCM service supply, addresses insufficient quality medical resource supply, and provides more patients with standardized and efficient diagnostic and treatment experiences. Additionally, the company launched an AI health assistant to further enhance patient-side diagnostic and treatment experiences.
**Overseas Revenue Growth Continues International Strategy Advancement**
In H1 2025, the company's Singapore business revenue reached RMB 2.143 million, up 121.16% year-on-year, achieving rapid development. Going forward, the company will continue advancing its internationalization strategy, including expanding overseas offline service networks. The development of digitalization and artificial intelligence technology is expected to significantly improve the insufficient supply of quality TCM medical resources overseas, with TCM AI services anticipated to be well-received by overseas users.
**Risk Factors:** Policy change risks, market and economic environment impacts, slower-than-expected store expansion and M&A activity, AI empowerment implementation below expectations or investment exceeding expectations.