CITIC Securities: The pharmacy sector continued to see double-digit year-on-year profit growth in the first quarter of 2026. Pay attention to the accelerating warming trend in the second quarter due to the elimination of the base effect of the flu season.

Zhongtai Securities research report stated that in mid-May 2026, the Medical Insurance Bureau held talks with some offline chain pharmacies. Due to the impact of consumer stimulation pressure and the diversion of funds from strong sectors, the stock prices of offline pharmacies have remained under pressure recently. From the perspective of Yifeng valuation review, the current ~13X dynamic PE valuation is close to the ten-year historical low of 12.4X in the third quarter of 2024. We believe that the reliability of the pharmacy industry's performance growth in 2026 is relatively high. Based on the current point in time, from the perspective of historical valuation center and dividend yield, the pharmacy sector has both the upward elasticity of valuation recovery and the defensive dividend attributes. We maintain a "buy" rating on Dashenlin and Yifeng Pharmacy, and recommend paying attention to the bottoming out and recovery performance of targets such as Laobaixing, Yixin Tang, and Jianzhijia.