Goldman Sachs: Gushengtang Holdings (2273.HK) 1Q26 Operational Update — Visits +15% Y/Y, In Line with FY26 Revenue Guidance

Goldman Sachs notes that Gushengtang Holdings (2273.HK) delivered total visits of 1.39 million in 1Q26, representing a 15% year-over-year increase that aligns perfectly with its FY26 revenue growth guidance of 15%. The positive operational update drove the stock price up to 10% intraday before closing 4.5% higher. This growth was primarily fueled by the organic expansion of existing clinics, as the Shandong Xin Yangguang acquisition was completed in April and contributed no first-quarter revenue. New physician hires increased approximately 50% year-over-year, while first-year per-capita revenue contribution surged roughly 80%, signaling improved onboarding efficiency and resilient demand. Management set an ambitious target of exceeding RMB 10 billion in group revenue by 2030, with overseas operations contributing over 20%. Average selling prices remained stable from 2H25 through 1Q26, and overall ASP is expected to hold steady in 2026. Regarding mergers and acquisitions, the company targets roughly RMB 1 billion in annual acquisitions, with about 50% overseas. Bank financing is projected to cover around 80% of transaction values, giving Gushengtang a cumulative M&A capacity of approximately RMB 5 billion over five years. Currently, six projects exceeding RMB 200 million are undergoing due diligence, and over ten projects totaling RMB 800 to 900 million are in advanced negotiations. For shareholder returns, the company has established a minimum 2026 dividend of HKD 450 million. Over the next three years, the payout ratio will exceed 60% or be bound by this HKD 450 million floor. An additional HKD 300 million buyback authorization has been approved, implying a total cash return exceeding 10%.