Group 1 - The board of directors of Jianzhijia Pharmaceutical Chain Group Co., Ltd. held its 12th meeting of the 6th session on August 28, 2025, with all 7 directors present and voting [1] - The board approved a proposal to cancel the supervisory board, establish employee directors, and amend the company's articles of association, which will be submitted for shareholder approval [2][3] - The company aims to improve its governance structure and operational norms by adding and revising several internal regulations, including a new "Management System for Departing Directors and Senior Management" and revisions to the "Audit Committee Work Guidelines" among 12 other documents [2]

Group 1 - The company held its ninth meeting of the sixth supervisory board on August 28, 2025, with all three supervisors present, complying with relevant laws and regulations [1] - The supervisory board approved the proposal regarding the company's 2025 semi-annual report, with a unanimous vote of 3 in favor and no opposition or abstentions [1][2] - The supervisory board confirmed that the preparation and review process of the 2025 semi-annual report adhered to legal and regulatory requirements, ensuring the information is true, accurate, and complete [2] Group 2 - The supervisory board also approved a proposal to cancel the supervisory board, establish employee directors, and amend the company's articles of association, which will be submitted to the shareholders' meeting for review [2]

Meeting Overview - The company will hold a shareholder meeting on September 17, 2025, at 14:30 in Kunming, Yunnan Province [1] - The meeting will utilize a combination of on-site and online voting methods [1] - The online voting system will be available from 9:15 to 15:00 on the day of the meeting [1][2] Voting Procedures - Shareholders can vote through the Shanghai Stock Exchange's online voting system, either via trading terminal or internet platform [2] - Shareholders with multiple accounts can aggregate their voting rights across all accounts [3] - Duplicate votes through different methods will be counted based on the first vote cast [3] Attendance Requirements - Only shareholders registered by the close of business on September 10, 2025, are eligible to attend the meeting [4] - Shareholders must complete registration in advance to ensure smooth proceedings [4] Proxy Voting - Shareholders can appoint a proxy to attend and vote on their behalf, with specific documentation required for both natural and legal persons [4][5] - The proxy must indicate their voting intention on the proxy form [7]

Report Information - Reported Company: Jianzhijia [17] - Industry: Pharmaceutical Commerce [2] - Research Date: August 29, 2025 [17] Core Views - The company is facing difficulties in obtaining medical insurance qualifications for newly opened stores, but is actively communicating with regulatory authorities. It is reducing its reliance on medical insurance and expanding non - medical insurance business, with the medical insurance settlement ratio dropping to 40% in H1 2025, a 4% year - on - year decrease [24]. - Through category adjustment, the company has achieved certain results. The proportion of prescription drug revenue structure decreased by 2.31%, while non - prescription drugs increased by 1.77%, and non - drug revenue structure increased by 0.55%. Inventory value decreased by 599 million yuan [24]. - The company's online business has been profitable for a long time. In H1 2025, the online platform's total operating income was 1,318,588,700 yuan, a 13.13% year - on - year increase, and the operating ratio increased from 25.99% to 29.59% [26]. Summary by Directory 01. Research Basic Situation - Research Object: Jianzhijia [17] - Industry: Pharmaceutical Commerce [17] - Reception Time: 2025 - 08 - 29 [17] - Reception Personnel: Chairman and General Manager Lan Bo, Financial Controller and Board Secretary Li Heng, Independent Director Guan Yunhong [17] 02. Detailed Research Institutions - Institutions: Investors and others [20] 03. Research Institution Proportion - No relevant content provided 04. Main Content Data - **Category Structure Change**: Newly opened stores in some areas have difficulties in obtaining medical insurance qualifications. The company is actively communicating with regulatory authorities. In H1 2025, the medical insurance settlement ratio was 40%, a 4% year - on - year decrease. The proportion of prescription drug revenue structure decreased by 2.31%, non - prescription drugs increased by 1.77%, and non - drug revenue structure increased by 0.55%. Inventory value decreased by 599 million yuan [24]. - **Online Business**: The company's online business has been profitable for a long time. In H1 2025, the online platform's total operating income was 1,318,588,700 yuan, a 13.13% year - on - year increase, and the operating ratio increased from 25.99% to 29.59% [26].

Market Overview - The Shanghai Composite Index closed at 3857.93 points, above the annual line, with a change of 0.37% [1] - The total trading volume of A-shares reached 28,301.97 billion yuan [1] Stocks Breaking Annual Line - A total of 22 A-shares have surpassed the annual line today, with notable stocks including Guoan Co., Transsion Holdings, and ST Huawen, showing divergence rates of 6.70%, 5.14%, and 4.43% respectively [1] - Stocks with smaller divergence rates that just crossed the annual line include Changjiang Electric, ST Zhongzhuang, and Laobaigan Liquor [1] Top Divergence Rates - The top three stocks with the highest divergence rates are: - Guoan Co. (10.07% increase, 6.70% divergence) - Transsion Holdings (7.17% increase, 5.14% divergence) - ST Huawen (4.86% increase, 4.43% divergence) [1] Additional Stock Performance - Other notable stocks include: - Shenyang Machine Tool (4.49% increase, 3.75% divergence) - Shangong Shenbei (4.20% increase, 3.64% divergence) - ST Boda (4.10% increase, 3.48% divergence) [1]

Core Insights - The company reported a revenue of 4.457 billion yuan and a net profit of 72.3782 million yuan for the first half of 2025, marking a year-on-year growth of 15.11% [1] Group 1: Business Transformation - The company is shifting its strategy from "meeting customer needs" to "stimulating customer demand" amidst a decline in customer traffic and average transaction value in the pharmaceutical retail industry [1] - The company is reducing its reliance on medical insurance and is deepening its transformation towards health products, specialized services, and omnichannel marketing [1] Group 2: Cost Control and Efficiency - The company has achieved a reduction in operating expenses, with a year-on-year decrease of 0.83% in total expenses for the first half of the year [1] - Continuous control over store rental, promotional, distribution, and management expenses has contributed to reversing the trend of increasing store costs [1]

Market Overview - The pharmaceutical commercial sector experienced a decline of 0.12% on August 29, with RunDa Medical leading the drop [1] - The Shanghai Composite Index closed at 3857.93, up 0.37%, while the Shenzhen Component Index closed at 12696.15, up 0.99% [1] Stock Performance - Baiyang Pharmaceutical (301015) saw a significant increase of 6.58%, closing at 26.40 with a trading volume of 183,800 shares and a transaction value of 479 million [1] - Other notable gainers included Jianzhijia (605266) with a 3.05% increase, and Yingte Group (000411) with a 2.65% increase [1] - Conversely, RunDa Medical (603108) declined by 2.17%, closing at 17.57 with a trading volume of 237,400 shares [2] Capital Flow - The pharmaceutical commercial sector experienced a net outflow of 300 million in main funds, while retail investors saw a net inflow of 214 million [2] - The sector's capital flow indicates that while institutional investors withdrew funds, retail investors were actively buying [2] Individual Stock Capital Flow - SaiLi Medical (603716) had a main fund net inflow of 97.15 million, but saw a net outflow from retail investors of 56.18 million [3] - YiXinTang (002727) experienced a net inflow of 5.04 million from main funds, while retail investors had a slight outflow of 0.67 million [3] - Nanjing Medical (600713) had a net inflow of 2.51 million from main funds, with retail investors experiencing a net outflow of 5.07 million [3]

Group 1 - The core viewpoint of the article is that Jianzhijia (SH 605266) held its 12th meeting of the 6th Board of Directors on August 28, 2025, to review the agenda including the 2025 semi-annual report and its summary [1] - For the first half of 2025, Jianzhijia's revenue composition was as follows: 90.17% from pharmaceutical retail and services, 5.51% from other businesses, 4.17% from convenience retail, and 0.15% from pharmaceutical wholesale [1]

Summary of the Conference Call for Jianzhijia Company Overview - **Company**: Jianzhijia - **Period**: First half of 2025 Key Industry Insights - **Revenue Performance**: Jianzhijia experienced a slight revenue decline of 0.64% year-on-year, attributed to challenges in the healthcare policy environment. However, the company managed to achieve a 15% increase in net profit attributable to shareholders through cost control and efficiency improvements [2][5][6]. - **Product Structure Adjustment**: The company reduced the proportion of prescription drugs by 6.67% while increasing sales of OTC drugs by 3.9%. The focus is on enhancing the marketing of brands like Kefu Mei and Fuyi Yan, aiming to boost their sales to tens of millions [2][8]. - **Online Business Growth**: The share of online business increased to 29.6%, with a 13% rise in overall revenue, compensating for some offline losses [2][9]. Core Strategies and Measures - **Cost Control and Efficiency**: Jianzhijia implemented cost control measures starting in 2024, resulting in a significant reduction in expense growth rates. The first quarter saw a 4.74% increase in expenses, down from 13.42% the previous year, and the second quarter further decreased to 6.21% [7]. - **Healthcare Policy Response**: The company is addressing challenges posed by healthcare policies through the establishment of internet hospitals and compliance efforts, advocating for practical policy considerations [2][12]. - **Focus on Health and Beauty Products**: Jianzhijia plans to develop health and beauty products, collaborating with partners like Beitaini to enhance operational efficiency and reduce price competition [2][13]. Financial Performance - **Net Profit Growth**: The net profit attributable to shareholders increased by 15% year-on-year, with a significant 120% year-on-year growth in non-recurring net profit in the second quarter [2][6]. - **Impact of Healthcare Policies**: The company faced a 4% decline in healthcare revenue compared to the previous year, but growth in non-healthcare products helped mitigate this impact [5]. Challenges and Future Outlook - **Store Count Reduction**: Jianzhijia reduced its store count by 82 due to local healthcare policy restrictions, yet managed to achieve some recovery through internal growth strategies [4]. - **Future Goals**: The company aims to continue its cost reduction efforts, having completed about 40% of its annual target, and plans to enhance operational efficiency and inventory management [11][34]. - **Market Potential**: Despite regulatory challenges, the health and beauty sector shows significant growth potential, with a notable increase in sales share for functional skincare products [14]. Technology and Innovation - **AI Utilization**: Jianzhijia is leveraging AI technologies, such as the Deepseek model, for operational diagnostics and efficiency improvements [3][29]. - **O2O Business Model**: The company’s O2O business has been successful due to a solid operational team and refined management practices, ensuring synergy between online and offline sales [2][28]. Regulatory Environment - **Impact of Regulatory Changes**: The company acknowledges the high regulatory burden in the industry, which presents both challenges and opportunities for long-term healthy development [12][19]. - **Future of Small Pharmacies**: The regulatory environment may lead to a consolidation of the market, with smaller pharmacies facing significant challenges in maintaining profitability [20][21]. Conclusion Jianzhijia is navigating a complex regulatory landscape while focusing on cost control, product diversification, and leveraging technology to enhance operational efficiency. The company is optimistic about future growth opportunities in the health and beauty sector despite current challenges.

Group 1 - The company reported a revenue of 4.457 billion yuan for the first half of the year, representing a year-on-year decrease of 0.64% [1] - The net profit attributable to shareholders of the listed company was 72.3782 million yuan, showing a year-on-year increase of 15.11% [1] - The basic earnings per share were 0.47 yuan per share [1]