Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Views of the Report - The company has made progress in R & D pipelines, including in the fields of oncology, cardiovascular and cerebrovascular diseases, gynecology and pain, and urinary system diseases [19]. - The company has achieved breakthroughs in the secondary development of listed products, such as the multiple effects of Kuntai Capsules, the high - level evaluation of Kushen Gel and Ningmitai Capsules [20][21]. - The company increased investment in Huilun Pharmaceutical due to its innovation ability, R & D achievements, and commercialization capabilities [22][23]. - The company's main products are currently not affected by the centralized procurement policy, and it will take measures to deal with potential impacts [24]. - The company's short - term business performance decline is affected by raw material price increases, R & D investment, etc., and it will take corresponding measures to deal with it [25][26]. - The company believes that traditional Chinese medicine innovation is an important part of the development of the pharmaceutical industry and will balance short - and long - term R & D investment [26][28]. 3. Summary According to the Directory 3.1 Research Basic Situation - Research object: Xintian Pharmaceutical - Industry: Traditional Chinese medicine - Reception time: August 26, 2025 - Reception personnel: Wang Guangping (Director, Deputy General Manager, Secretary of the Board of Directors), Liang Yongsong (Securities Manager) [16] 3.2 Detailed Research Institutions - Fund management companies: Morgan Stanley Fund, Caitong Fund, Guohai Franklin Fund, Morgan Fund, Zhongou Fund - Other types: Xianghe Investment, Ruiyi Investment - Securities companies: Orient Securities Self - operation, Hua'an Securities, Zhongyou Securities [17] 3.3 Research Institution Proportion No relevant information provided. 3.4 Main Content Data - **R & D pipelines**: In the oncology field, a 2.3 - class improved new drug submitted an IND application in July 2025; in the cardiovascular and cerebrovascular field, two 1.1 - class traditional Chinese medicine innovative drugs are in the process of process research; in the gynecology and pain field, classic famous prescriptions are preparing for NDA application; in the urinary system diseases field, a 1.1 - class traditional Chinese medicine innovative drug project is being advanced [19]. - **Secondary development of listed products**: Kuntai Capsules have multiple effects on perimenopausal syndrome and reproductive health; Kushen Gel was rated as Class A in clinical value and won a science and technology progress award; Ningmitai Capsules were certified as Class A in clinical comprehensive evaluation and are undergoing a multi - center clinical trial [20][21]. - **Investment in Huilun Pharmaceutical**: Huilun Pharmaceutical has a strong R & D system and commercialization experience. The company increased its investment in Huilun Pharmaceutical by 40 million yuan in August 2025 [22][23]. - **Centralized procurement policy**: The company's main products are currently not affected by the centralized procurement policy. It will increase OTC market investment and control costs [24]. - **Business performance**: The decline in business performance is affected by raw material price increases and R & D investment. The company will adjust marketing strategies and manage raw material procurement [25][26]. - **Innovation drug strategy**: Traditional Chinese medicine innovation is an important part of the company's development. The company will balance short - and long - term R & D investment [26][28].

Group 1 - The core viewpoint of the article is that Xintian Pharmaceutical (SZ 002873) has engaged with investors through a research meeting, indicating active investor relations and transparency [1] - For the first half of 2025, Xintian Pharmaceutical reported that its main revenue accounted for 99.9% of total revenue, with other business activities contributing only 0.1% [1] - As of the report date, Xintian Pharmaceutical has a market capitalization of 3.1 billion yuan [1] Group 2 - The pet industry is experiencing significant growth, with a market size of 300 billion yuan, leading to positive performance among listed companies in this sector [1]

Group 1 - The company held an investor relations event with 10 institutions, including Morgan Stanley Fund and Caitong Fund, on August 26, 2025, in Shanghai [1] - The company is advancing multiple research pipelines in important therapeutic areas, including oncology, cardiovascular, gynecology, and urology, with significant progress in clinical trials and drug development [2] - The company has made substantial investments in Huilun Pharmaceutical, focusing on major diseases and critical care, with nearly 20 innovative drug research pipelines expected to enter clinical phases by the end of the year [3] Group 2 - The company has not been affected by centralized procurement due to its unique patented products and is increasing investment in the OTC market while enhancing brand building [4] - The company experienced a decline in operating performance in the first half of 2025 due to rising raw material prices and changes in the pharmaceutical industry, but anticipates a return to stable growth as raw material prices decrease [4] - The company emphasizes the importance of traditional Chinese medicine innovation in the pharmaceutical industry and has established a comprehensive R&D platform to ensure balanced strategic development and shareholder returns [5]

R&D Pipeline and Innovations - The company has three ongoing 1.1 class clinical phase III projects and has made breakthroughs in other important therapeutic areas, including oncology, cardiovascular, gynecology, and urology [2][3]. - In the oncology field, a modified new drug for auxiliary treatment has been submitted for IND approval in July 2025 [2]. - The company is advancing a 1.1 class innovative drug for treating benign prostatic hyperplasia and related symptoms [2]. Product Development and Clinical Research - The company has achieved significant results in the secondary development of existing products, such as Kun Tai capsules, which have shown efficacy in alleviating perimenopausal syndrome and improving reproductive health [3]. - The company’s product Kushi Gel has been rated as A-level clinical value, demonstrating its effectiveness in maintaining vaginal microecological balance [3]. - The company is conducting a multi-center, randomized, double-blind clinical trial for Ning Mi Tai capsules, approved by the National Medical Products Administration [3]. Investment in Subsidiaries - The company has increased its investment in Huilun Pharmaceutical, recognizing its innovative capabilities and complete commercialization experience [4][5]. - Huilun Pharmaceutical has nearly 20 small molecule drug innovation projects, with over ten expected to enter clinical phases by the end of 2025 [4]. Market Strategy and Challenges - The company’s main products are currently not affected by centralized procurement policies due to their unique patent status [7]. - The company plans to enhance its OTC market presence and brand building to mitigate the impact of market fluctuations [7]. - Rising raw material costs and industry policy changes have led to a temporary decline in revenue, prompting the company to adjust its marketing strategies and strengthen cost control [8][9]. Future Outlook and R&D Focus - The company emphasizes the importance of traditional Chinese medicine (TCM) innovation, aligning with national policy support and market demand for chronic disease treatment [10]. - A balanced approach to short-term and long-term R&D investments is crucial for sustainable growth and shareholder returns [11].

Core Viewpoint - New Tian Pharmaceutical (002873.SZ) is increasing its investment in Shanghai Huilun Pharmaceutical Co., Ltd. through a plan to use 40 million yuan for equity investment, despite previous failed attempts to gain full control of Huilun Pharmaceutical [1][2]. Investment Details - After this investment, New Tian's total investment in Huilun will reach 360 million yuan, increasing its shareholding to 15.4567% [2][7]. - The investment will be executed through a combination of capital increase and share acquisition, with 20 million yuan allocated for capital increase and another 20 million yuan for share purchase from a shareholder [3][7]. - Other investors, including Yantai Tianzi Huilai Venture Capital and Beijing Jinhui Feng Investment Management, will also participate in this round of funding, contributing a total of 72 million yuan at a price of 8.5 yuan per share [3]. Historical Context - New Tian has made multiple investments in Huilun since early 2020, with the most recent failed attempt at a full acquisition in March 2024 [1][6]. - The company has previously invested 20 million yuan for a 1.98% stake, followed by additional investments that increased its stake to 14.5971% before this latest round [4][7]. Financial Performance - New Tian's revenue and net profit have been declining for two and a half years, with a reported revenue of 358 million yuan in the first half of 2025, down 18.88% year-on-year, and a net profit of 5.77 million yuan, down 80.99% [2][9]. - Huilun's financial performance has also been volatile, with a net loss of 19.29 million yuan in the first half of 2025 and a significant drop in revenue and profit in recent years [2][8][9]. Strategic Rationale - New Tian aims to enhance its competitiveness in the small molecule drug sector through this investment, focusing on areas such as oncology and cardiovascular diseases [2][8]. - The investment is seen as a strategic move to position New Tian as a leading comprehensive pharmaceutical enterprise, despite the challenges faced by both companies [8][9].

Core Viewpoint - New Tian Pharmaceutical (002873.SZ) is increasing its investment in Shanghai Huilun Pharmaceutical Co., Ltd. (Huilun Pharmaceutical), a company controlled by its actual controller, Dong Dalun, through a capital increase and share transfer, despite previous failed attempts to fully acquire it [1][2]. Investment Details - The company plans to invest 40 million yuan, which will bring its total investment in Huilun Pharmaceutical to 360 million yuan, increasing its shareholding to 15.4567% [2][3]. - The investment will be executed through a capital increase of 20 million yuan for 235,294 shares and a share transfer of 20 million yuan for the same number of shares from a shareholder [3][4]. Financial Performance - New Tian Pharmaceutical reported a revenue of 358 million yuan in the first half of 2025, a decrease of 18.88% year-on-year, and a net profit of 5.77 million yuan, down 80.99% year-on-year, marking two and a half years of continuous decline [2][10]. - Huilun Pharmaceutical has shown significant revenue fluctuations, with revenues of 414 million yuan, 998 million yuan, 768 million yuan, and 391 million yuan from 2022 to the first half of 2025, and net profits of -264 million yuan, 30.83 million yuan, 6.53 million yuan, and -19.29 million yuan in the same period [8][10]. Strategic Rationale - The investment aims to enhance New Tian Pharmaceutical's competitiveness in the small molecule drug sector, particularly in areas such as oncology and cardiovascular diseases, as Huilun Pharmaceutical has developed several promising chemical drug pipelines [8][10]. - The pre-investment valuation of Huilun Pharmaceutical is 3.36 billion yuan, which represents a 2.95 times increase compared to the initial investment valuation five years ago [10].

Market Performance - The Chinese medicine sector rose by 0.47% on August 25, with Tianmu Pharmaceutical leading the gains [1] - The Shanghai Composite Index closed at 3883.56, up 1.51%, while the Shenzhen Component Index closed at 12441.07, up 2.26% [1] Top Gainers in Chinese Medicine Sector - Tianmu Pharmaceutical (600671) closed at 19.80, up 10.00% with a trading volume of 144,000 shares and a transaction value of 271 million [1] - Jizhitang (000989) closed at 12.71, up 8.08% with a trading volume of 895,100 shares [1] - Zhendong Pharmaceutical (300158) closed at 66.80, up 7.28% with a trading volume of 1,339,500 shares [1] - Enwei Pharmaceutical (301331) closed at 39.08, up 6.95% with a trading volume of 40,600 shares [1] - New Great Pharmaceutical (002873) closed at 13.31, up 6.06% with a trading volume of 537,200 shares [1] Decliners in Chinese Medicine Sector - Jichuan Pharmaceutical (600566) closed at 26.57, down 3.45% with a trading volume of 277,600 shares [2] - ST Xiangxue (300147) closed at 10.44, down 2.79% with a trading volume of 356,600 shares [2] - Lingrui Pharmaceutical (600285) closed at 23.68, down 1.82% with a trading volume of 170,300 shares [2] Capital Flow Analysis - The Chinese medicine sector experienced a net outflow of 334 million from institutional investors, while retail investors saw a net inflow of 164 million [2][3] - Major stocks like Jizhitang and Tianmu Pharmaceutical had significant net inflows from retail investors, while institutional investors showed mixed interest [3]

Company Overview - Xintian Pharmaceutical Co., Ltd. is located in Guiyang, Guizhou Province, established on August 11, 1995, and listed on May 19, 2017. The company specializes in the research, production, and sales of traditional Chinese medicine [1][2]. Financial Performance - For the first half of 2025, Xintian Pharmaceutical reported revenue of 358 million yuan, a year-on-year decrease of 18.88%, and a net profit attributable to shareholders of 5.77 million yuan, down 80.99% year-on-year [2]. - The company has distributed a total of 127 million yuan in dividends since its A-share listing, with 61.87 million yuan distributed over the past three years [3]. Stock Performance - As of August 25, Xintian Pharmaceutical's stock price increased by 2.23% to 12.83 yuan per share, with a total market capitalization of 3.132 billion yuan. The stock has risen 36.87% year-to-date but has seen a decline of 7.10% over the past five trading days [1]. - The company has appeared on the "Dragon and Tiger List" twice this year, with the most recent appearance on August 20, where it recorded a net purchase of 56.33 million yuan [1]. Shareholder Information - As of August 8, the number of shareholders increased to 32,800, a rise of 36.29%, while the average circulating shares per person decreased by 26.63% to 7,272 shares [2]. - Notably, the fifth-largest circulating shareholder is the Nuoan Multi-Strategy Mixed A fund, which holds 1.0731 million shares as a new shareholder [3].

Core Viewpoint - The traditional Chinese medicine (TCM) sector is experiencing a significant surge in stock performance, driven by strong policy support and increasing market demand for TCM products [1][2]. Group 1: Market Performance - The TCM sector has shown rapid growth, with companies like Xintian Pharmaceutical leading the charge by hitting the daily limit on stock price increases, accompanied by a notable increase in trading volume [1]. - Other companies in the sector, such as Yibai Pharmaceutical, Zhendong Pharmaceutical, and others, are also witnessing substantial gains, indicating a broad-based rally within the TCM industry [1]. Group 2: Policy Support - The Chinese government is enhancing support for the TCM industry, as evidenced by the State Council's issuance of guidelines aimed at improving TCM quality and promoting high-quality development within the sector [1][2]. - The guidelines emphasize the protection and utilization of TCM resources, as well as optimizing the industrial structure and strengthening the TCM supply chain [1]. Group 3: Market Demand - There is a growing demand for TCM driven by increasing health awareness among the population and the aging demographic, which is expected to continue fueling the sector's growth [1][2]. - The expansion of the TCM market is anticipated to create new opportunities in related fields, such as TCM raw material cultivation, which will benefit farmers and agricultural service providers [1]. Group 4: Related Sectors - The TCM research and development sector is poised to benefit from government encouragement for innovation, leading to increased investment in new TCM drugs and classic formulations [2]. - The healthcare sector is closely linked to TCM, with the development of TCM products expected to drive innovation and upgrades in healthcare offerings, including TCM therapies and wellness services [2]. Group 5: Challenges and Future Potential - Despite the positive outlook, the TCM industry faces challenges such as the need for unified quality standards and sustainable resource utilization [2]. - However, the combination of policy support, growing market demand, and the industry's own development trends suggests that the TCM sector and its related fields have significant growth potential in the future [2].

Company Overview - Xintian Pharmaceutical's stock price closed at 12.55 yuan on August 22, 2025, down 2.18% from the previous trading day [1] - The stock experienced significant volatility, opening at 13.00 yuan, reaching a high of 13.29 yuan, and a low of 12.49 yuan, with an amplitude of 6.24% [1] - The company specializes in the research, development, production, and sales of traditional Chinese medicine and chemical drugs, covering areas such as cold medicine and cardiovascular drugs [1] Market Activity - On August 22, the net outflow of main funds was 5.1317 million yuan, with a cumulative net outflow of 3.2483 million yuan over the past five days [1] - The turnover rate for the day was 14.66%, with a trading volume of 349,900 hands and a total transaction amount of 448 million yuan [1] Industry Context - Xintian Pharmaceutical operates within the pharmaceutical manufacturing industry, which includes sectors related to traditional Chinese medicine and influenza [1]