一心堂(002727) - 2025 Q2 - 季度财报

Important Notes, Table of Contents, and Definitions This section provides essential disclaimers, the report's structural overview, a list of reference documents, and definitions of key terms for clarity Important Notes This section includes the company's board of directors and senior management's assurance regarding the truthfulness, accuracy, and completeness of the semi-annual report, alerts investors to investment risks, and discloses the current profit distribution plan - The company's board of directors and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, free from false records, misleading statements, or major omissions[5] - Company head Ruan Hongxian, chief accountant Xiao Donglei, and accounting department head Yin Pengjuan declare that the financial report in this semi-annual report is true, accurate, and complete[5] - The profit distribution plan approved by the board of directors is to distribute a cash dividend of RMB 2 (tax inclusive) per 10 shares to all shareholders, based on the total share capital of 585,604,125 shares after deducting shares in the buyback special securities account, with no bonus shares or capital reserve conversions[5] - Forward-looking statements regarding future plans in this report do not constitute a substantive commitment to investors, so investors should be aware of investment risks[5] Table of Contents This section presents the complete table of contents for the semi-annual report, including nine main chapters and their starting page numbers, providing investors with the overall report framework - The report's table of contents includes nine main chapters, covering important notes, company profile, management discussion and analysis, corporate governance, significant events, share changes, bond information, financial reports, and other submitted data[8] Reference Documents This section lists all original company documents, announcements, and financial statements publicly disclosed during the reporting period as reference documents, specifying the company's board of directors office as the storage location - Reference documents include financial statements bearing the signatures of the company's head, chief accountant, and head of accounting, original copies of all company documents and announcements publicly disclosed during the reporting period, and semi-annual reports published in other securities markets[10][11][12] - The aforementioned reference documents are available at the company's board of directors office[13] Definitions This section provides definitions for key terms and company-related entities used in the report to ensure clear understanding of the information - The report defines regulatory bodies such as the China Securities Regulatory Commission, Ministry of Commerce, National Medical Products Administration, and Shenzhen Stock Exchange, as well as key subsidiaries like the Company, Guangxi Yixintang, and Guizhou Yixintang[14] - Industry-specific terms such as medical insurance stores, O2O, and B2C, along with general terms like financial statements, A-shares, and reporting period, are clearly explained[14] Company Profile and Key Financial Indicators This section provides an overview of the company's basic information, contact details, and key financial performance metrics and indicators for the reporting period Company Profile This section provides the company's basic information, including stock abbreviation, code, listing exchange, and legal representative, confirming no changes in contact details or information disclosure locations during the reporting period Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Yixintang | | Stock Code | 002727 | | Stock Exchange | Shenzhen Stock Exchange | | Company Chinese Name | Yixintang Pharmaceutical Group Co., Ltd. | | Legal Representative | Ruan Hongxian | Contacts and Contact Information This section lists the names, contact addresses, phone numbers, faxes, and email addresses of the company's Board Secretary and Securities Affairs Representative for investor communication Company Contact Information | Position | Name | Contact Address | Phone | Fax | Email | | :--- | :--- | :--- | :--- | :--- | :--- | | Board Secretary | Li Zhenghong | No. 1 Hongxiang Road, Kunming Economic and Technological Development Zone, Yunnan Province | 0871-68185283 | 0871-68185283 | 002727ir@hxyxt.com | | Securities Affairs Representative | Yin Guanxiang | No. 1 Hongxiang Road, Kunming Economic and Technological Development Zone, Yunnan Province | 0871-68185283 | 0871-68185283 | 002727ir@hxyxt.com | Other Information This section confirms no changes in the company's registered address, office address, website, email, or information disclosure and storage locations during the reporting period, with details available in the 2024 annual report - The company's registered address, office address, website, and email remained unchanged during the reporting period[18] - Information disclosure and storage locations remained unchanged during the reporting period, with details available in the 2024 annual report[19] Key Accounting Data and Financial Indicators This section presents the company's key accounting data and financial indicators for the current and prior year periods, including operating revenue, net profit, and earnings per share, along with year-on-year changes Key Accounting Data and Financial Indicators (Year-on-Year) | Indicator | Current Period (RMB) | Prior Year Period (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 8,914,493,271.24 | 9,305,073,342.58 | -4.20% | | Net Profit Attributable to Shareholders of Listed Company | 249,650,382.88 | 281,904,888.90 | -11.44% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items) | 243,199,442.19 | 298,071,629.16 | -18.41% | | Net Cash Flow from Operating Activities | 905,013,257.53 | 921,326,072.73 | -1.77% | | Basic Earnings Per Share (RMB/share) | 0.4263 | 0.4730 | -9.87% | | Diluted Earnings Per Share (RMB/share) | 0.4263 | 0.4730 | -9.87% | | Weighted Average Return on Net Assets | 3.34% | 3.57% | -0.23% | Period-End Financial Position Indicators (Year-on-Year) | Indicator | As of End of Current Period (RMB) | As of End of Prior Year (RMB) | Change from Prior Year-End | | :--- | :--- | :--- | :--- | | Total Assets | 16,161,151,985.67 | 16,830,316,478.61 | -3.98% | | Net Assets Attributable to Shareholders of Listed Company | 7,418,679,897.32 | 7,491,014,022.79 | -0.97% | Differences in Accounting Data Under Domestic and International Accounting Standards This section states that during the reporting period, there were no differences in net profit and net assets disclosed in the company's financial reports under International or overseas accounting standards compared to Chinese accounting standards - During the reporting period, the company had no differences in net profit and net assets between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards[22] - During the reporting period, the company had no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards[23] Non-Recurring Gains and Losses Items and Amounts This section details non-recurring gains and losses items and their amounts for the reporting period, totaling RMB 6,450,940.69, and clarifies that the company does not classify non-recurring items as recurring Non-Recurring Gains and Losses Items and Amounts | Item | Amount (RMB) | | :--- | :--- | | Gains/Losses on Disposal of Non-Current Assets | 381,225.62 | | Government Subsidies Recognized in Current Profit and Loss (excluding those closely related to normal business operations, compliant with national policies, enjoyed by fixed standards, and having a continuous impact on company profit and loss) | 8,826,757.39 | | Other Non-Operating Income and Expenses Apart from the Above | -1,650,786.96 | | Less: Income Tax Impact | 1,255,665.85 | | Minority Interest Impact (After Tax) | -149,410.49 | | Total | 6,450,940.69 | - The company does not classify non-recurring gains and losses items listed in 'Interpretive Announcement No. 1 on Information Disclosure by Companies Issuing Securities - Non-Recurring Gains and Losses' as recurring gains and losses[26] Management Discussion and Analysis This section provides an in-depth analysis of the company's operations, financial performance, core competencies, investment activities, and risk management strategies during the reporting period I. Main Business Activities During the Reporting Period The company's main business is pharmaceutical retail and distribution, shifting towards quality improvement and a customer-centric big health strategy, with 11,372 stores and diversified operations including professional pharmacies and cosmetic pharmacies, alongside significant growth in new retail and cross-border business initiatives (I) Industry Development Overview In 2025, the pharmaceutical retail industry is shifting from scale expansion to quality enhancement, redefining growth through diversified services and professional capabilities, with the company firmly positioned as a customer-centric leader in the big health sector - In 2025, the pharmaceutical retail industry is transitioning from scale expansion to quality improvement, redefining growth logic through diversified services and professional capabilities[28] - The Premier of the State Council, in the 2025 government work report, proposed strengthening basic medical and health services, implementing a health-first development strategy, and promoting coordinated development and governance of medical care, medical insurance, and pharmaceuticals[28] - The company is customer-centric, committed to providing higher quality, more convenient, and empathetic health services, clearly positioning itself as a leader in the big health industry[28] (II) Company's Market Position The company's core business is pharmaceutical retail chain and distribution, establishing itself as a leading direct-operated chain enterprise in China, focusing on Southwest and South China regions while also developing in North China, and has received multiple industry honors including second place in China's Top 100 Direct-Operated Pharmacies - The company's main business activities are pharmaceutical retail chain and pharmaceutical distribution, with pharmaceutical retail chain being the core business[29] - The company has become one of the leading direct-operated pharmaceutical retail chain enterprises in China, focusing on development in the Southwest and South China regions, while also considering store expansion in North China[29] - The company received multiple honors, including second place in China Pharmacy's 2024-2025 Top 100 Direct-Operated Chains and fifth place in the Value List Top 100, fifth place in Minai.com's 2023-2024 China Chain Pharmacy Comprehensive Strength Top 100, second place in Direct Operation Strength Top 100, and first place in Minai.com's 2022 China Chain Pharmacy Direct-Operated Store Count ranking[29] (III) Company Business Model The company employs a 'centralized procurement + strategic cooperation' model to reduce costs through group-wide negotiation and digital management, while its sales model centers on direct-operated chains, integrating online and offline channels, and expanding into health food, maternal and infant, and beauty categories for balanced growth - The company primarily adopts a 'centralized procurement + strategic cooperation' purchasing model, reducing procurement costs through group-wide unified negotiation, scaled management, and coordinated resource allocation[30] - Leveraging a digital management system, the company achieves precise procurement demand forecasting, dynamic inventory optimization, and full supply chain visibility[30] - The company has established a multi-dimensional sales model centered on 'direct-operated chains, supported by omni-channel integration, and characterized by multi-category synergy,' forming a new retail closed-loop of 'online ordering - in-store pickup'[30] - The company is expanding into big health categories such as health foods, maternal and infant products, personal care and beauty, trendy lifestyle products, and wellness items to maintain a balanced development of scale and efficiency[30] (IV) Progress of Company's Main Business Activities During the reporting period, the company deepened its core regional store network, reaching 11,372 stores by period-end, actively diversifying into professional and cosmetic pharmacies with a 70% coverage target in 2-3 years. Professional pharmacies focus on prescription and chronic disease management, while medicine-food homology business launched over 20 new health foods. New retail sales hit RMB 727 million, with O2O at 81.02%, and Yixintang Baian International was established in Hong Kong for cross-border operations 1. Store Operations Analysis During the reporting period, the company maintained a high-density store layout in core regions, with 11,372 operational stores by period-end, including 11,338 leased properties, opening 203 new stores and closing 241, while the top ten revenue-generating stores accounted for 1.37% of total operating revenue - During the reporting period, the company diligently maintained a high-density store layout in core regions, continuously strengthening its competitive advantage in key development areas[31] Operational Stores by Property Ownership at Period-End | Region | Business Format | Number of Owned Stores | Owned Property Area (sqm) | Number of Leased Stores | Leased Property Area (sqm) | | :--- | :--- | :--- | :--- | :--- | :--- | | Southwest Region | Pharmaceutical Retail Chain | 34 | 6,449.29 | 8,644 | 1,106,779.06 | | South China Region | Pharmaceutical Retail Chain | - | - | 1,556 | 200,571.66 | | North China Region | Pharmaceutical Retail Chain | - | - | 778 | 106,294.43 | | East China Region | Pharmaceutical Retail Chain | - | - | 79 | 13,891.49 | | Central China Region | Pharmaceutical Retail Chain | - | - | 281 | 36,813.33 | | Total | | 34 | 6,449.29 | 11,338 | 1,464,349.97 | Store Expansion in Key Regions During the Reporting Period (Jan-Jun 2025) | Region | Stores at Beginning of Period | New Stores Opened | Stores Closed | Stores at End of Period | | :--- | :--- | :--- | :--- | :--- | | Yunnan Province | 5,575 | 79 | 76 | 5,539 | | Sichuan Province | 1,973 | 36 | 24 | 1,971 | | Chongqing City | 611 | 7 | 39 | 577 | | Guangxi Province | 1,029 | 30 | 48 | 1,001 | | Shanxi Province | 771 | 6 | 25 | 747 | | Guizhou Province | 600 | 17 | 17 | 591 | | Hainan Province | 541 | 23 | 1 | 555 | | Henan Province | 288 | 3 | 10 | 281 | | Shanghai City | 80 | 0 | 1 | 79 | | Tianjin City | 30 | 2 | 0 | 31 | | Total | 11,498 | 203 | 241 | 11,372 | - The cumulative operating revenue of the top ten revenue-generating stores accounted for 1.37% of the company's total operating revenue[33] 2. Diversified Store Development The company actively responds to national policies by categorizing pharmacies into professional and cosmetic pharmacies, establishing a 'professional services + pan-health ecosystem' dual-track model, planning to complete 1,000 cosmetic pharmacy renovations in 2025 and cover 70% of stores within 2-3 years by introducing beauty, maternal and infant, and trendy categories to enhance customer transaction value and repurchase rates - The company actively responds to national requirements for 'classified and graded management of retail pharmacies,' categorizing stores into professional pharmacy development and cosmetic pharmacy development directions[35] - The company has established a dual-track model centered on professional pharmacies primarily selling medicines and cosmetic pharmacies with diversified full-category operations, promoting a transformation from traditional pharmaceutical retail to a 'professional services + pan-health ecosystem'[36] - Future stores will develop towards a model of 30% professional pharmacies and 70% multi-category operating stores[36] - In 2025, the entire group plans to complete the renovation of 1,000 cosmetic pharmacies, with 500 stores in Yunnan Province and 500 stores collectively by subsidiaries outside Yunnan Province[36] - The company innovatively introduced trendy lifestyle categories, creating synergy with existing big health sub-categories, attracting more young customer groups, and achieving increased customer transaction value and repurchase rates[37] 3. Professional Pharmacy Development Professional pharmacies focus on prescription drug sales, DTP, and chronic disease management, enhancing service capabilities through talent development and system upgrades, with plans to create nearly 1/3 'pharmacy-clinic' stores to build a professional pharmacy + medical ecosystem, and leveraging its wholly-owned subsidiary, Yiyang Company, to develop a three-tier integrated medical and elderly care model encompassing institutional, community, and home-based care - Professional pharmacies focus on specialized prescription drug sales, vigorously developing DTP and chronic disease management, and strengthening prescription drug service capabilities through talent development plans and enhanced systematic upgrade training[38] - Within its professional pharmacies, the company plans to establish nearly 1/3 'pharmacy-clinic' stores to build a professional pharmacy + medical ecosystem, serving new public health demands[38] - Wholly-owned subsidiary Yiyang Company has initially formed a three-tier integrated medical and elderly care model encompassing institutional, community, and home-based care, developing institutional medical and elderly care based on the 'medical-elderly care integration' model of Jinding Geriatric Hospital and Jindingshan Nursing Home[39] - For community elderly care, the company leverages Chuncheng Huigu Community Elderly Care Service Center and managed community elderly care centers, combining with over 3,000 pharmacies to establish elderly care service stations[39] 4. Medicine-Food Homology Business In the first half of 2025, the company fully completed product traceability code attachment, registered 342 traditional Chinese medicine formula granule quality standards and production process research varieties, and achieved 300 medical channel sales and customer developments. Following national policies, the company developed light medical insurance or non-medical insurance products and medicine-food homology wellness products, launching over 20 new health food products in the first half - In the first half of 2025, the company fully completed product traceability code attachment, registered 342 traditional Chinese medicine formula granule quality standards and production process research varieties, and achieved 300 medical channel sales and customer developments[40] - The company closely follows national policy adjustments, accelerating the transformation of traditional Chinese medicine from treatment to wellness, developing light medical insurance or non-medical insurance products, and medicine-food homology wellness products[40] - Over 20 new health food products were developed and launched in the first half, with future plans to further increase investment in medicine-food homology products and develop solid beverages, seasonings, and tea-containing products based on Yunnan's specialty products[40][41] 5. New Retail Business Development Yixintang's new retail business leverages technology to provide precise and convenient services, achieving RMB 727 million in sales in the first half of 2025, with O2O sales accounting for 81.02%. Future plans include a customer-centric 'professional service + technology empowerment' dual-drive strategy, deepening consumer health demand prediction models, and exploring cross-border e-commerce and local health service ecosystem synergy through Hainan Free Trade Port policies - In the first half of 2025, Yixintang's new retail sales reached RMB 727 million, with O2O sales accounting for 81.02%[42] - In the future, the new retail segment will remain customer-centric, driven by 'professional services + technology empowerment,' deepening consumer health demand prediction models based on big data and artificial intelligence technologies[42] - The company will collaborate with upstream suppliers to establish a product selection synergy mechanism, expanding the market presence of B2C private labels; simultaneously, it will leverage Hainan Free Trade Port policy opportunities to explore a synergistic model between cross-border e-commerce and local health service ecosystems[42] 6. Baian International In May 2025, the company established Yixintang Baian International Co., Ltd. as a joint venture in Hong Kong, serving as the group's core cross-border business platform, leveraging the combined advantages of Hong Kong's free port and Hainan's free trade port policies. It plans to build an international supply chain system of 'intelligent procurement - efficient logistics - data empowerment' and aims to complete the introduction of 10 licensed products and establish a cross-regional distribution network in the second half of the year - In May 2025, the company established Yixintang Baian International Co., Ltd. as a joint venture in Hong Kong, serving as the group's core cross-border business platform[43] - Baian International will fully leverage the combined policy advantages of Hong Kong's free port and Hainan's free trade port, building an international supply chain system of 'intelligent procurement - efficient logistics - data empowerment' in the future[43] - Through an AI supplier evaluation system, 87 high-value chronic disease medications are carefully selected, enabling rapid DTP specialized drug delivery via a three-tier warehousing network, and utilizing blockchain technology to ensure full traceability[43] - In the second half of the year, the focus will be on completing the introduction of 10 licensed products and establishing a cross-regional distribution network, laying the foundation for supply chain enhancement in 2026[43] II. Analysis of Core Competencies The company's core competencies lie in its multi-dimensional store cluster strategy, ability to meet diverse customer needs with multiple categories, and a robust supply chain system, achieving deep regional coverage and efficient operations through differentiated store positioning and intelligent information systems, satisfying varied consumer demands by expanding into comprehensive big health categories, and building an efficient, transparent pharmaceutical supply chain paradigm through digitalization and intelligent upgrades - The company through a four-tier multi-dimensional store cluster strategy ('provincial capital - prefecture - county - township') achieves deep coverage, forming a vertical network comprising full-category flagship stores, single-category flagship stores, category-enhanced stores, standard stores, and community/township stores[44] - With pharmaceuticals as its core, the company gradually expands into comprehensive big health categories to meet diverse consumer needs, forming a multi-dimensional layout of 'pharmaceuticals + health products + services,' adding beauty and skincare, personal care, maternal and infant products, functional foods, and trendy lifestyle categories[45] - The company has fully integrated store replenishment and logistics replenishment, establishing a refined, efficient, and paperless logistics management system that tracks logistics operations throughout, implementing closed-loop management[46] - The company is gradually building a new paradigm for pharmaceutical supply chain with 'intelligent centralized procurement + digital logistics + omni-channel synergy,' enhancing procurement accuracy through a dynamic big data forecasting system and equipped with an automated sorting system to support '30-minute express delivery'[47] III. Main Business Analysis During the reporting period, the company's operating revenue decreased by 4.20% year-on-year, and net profit attributable to shareholders of the listed company decreased by 11.44%. Retail business remained the primary revenue source but declined by 2.94%, while wholesale business decreased by 9.23%. Western and traditional Chinese medicines were the main products, with the Southwest region as the primary market, though Central China's revenue grew by 75.31%. Financial expenses increased by 30.40% due to lower agreed deposit interest rates, and net cash flow from investment activities surged by 464.23%, mainly driven by the recovery of fixed deposit principal and reduced payments for store acquisitions Key Financial Data Year-on-Year Changes | Indicator | Current Period (RMB) | Prior Year Period (RMB) | Year-on-Year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 8,914,493,271.24 | 9,305,073,342.58 | -4.20% | | | Operating Cost | 6,013,461,977.11 | 6,379,971,960.68 | -5.74% | | | Selling Expenses | 2,250,333,897.33 | 2,220,976,513.76 | 1.32% | | | Administrative Expenses | 223,638,879.47 | 227,890,421.64 | -1.87% | | | Financial Expenses | 55,717,575.46 | 42,728,775.98 | 30.40% | Due to policy adjustments, agreed deposit interest rates further decreased, leading to a reduction in bank deposit interest earned by the company | | Income Tax Expense | 63,143,798.38 | 48,974,372.19 | 28.93% | | | R&D Investment | 24,486,252.00 | 24,066,202.14 | 1.75% | | | Net Cash Flow from Operating Activities | 905,013,257.53 | 921,326,072.73 | -1.77% | | | Net Cash Flow from Investing Activities | 765,626,647.90 | -210,204,128.69 | 464.23% | Formed by the recovery of fixed deposit principal and reduced payments for store acquisitions in this period | | Net Cash Flow from Financing Activities | -713,124,153.18 | -856,268,842.14 | 16.72% | | | Net Increase in Cash and Cash Equivalents | 957,515,752.25 | -145,146,898.10 | 759.69% | Formed by the recovery of fixed deposit principal and reduced payments for store acquisitions, increased borrowings received, and decreased total dividends distributed in this period | Operating Revenue Composition (by Industry) | By Industry | Current Period Amount (RMB) | Proportion of Operating Revenue | Prior Year Period Amount (RMB) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Retail Business | 6,520,309,406.49 | 73.15% | 6,718,009,020.79 | 72.20% | -2.94% | | Wholesale Business | 2,111,305,464.15 | 23.68% | 2,326,100,535.09 | 25.00% | -9.23% | | Other Businesses | 282,878,400.60 | 3.17% | 260,963,786.70 | 2.80% | 8.40% | Operating Revenue Composition (by Product) | By Product | Current Period Amount (RMB) | Proportion of Operating Revenue | Prior Year Period Amount (RMB) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Western and Traditional Chinese Medicines | 6,688,520,230.56 | 75.03% | 6,997,131,756.71 | 75.20% | -4.41% | | Medical Devices, Family Planning, and Disinfection Products | 583,586,345.26 | 6.55% | 591,081,037.75 | 6.35% | -1.27% | | Traditional Chinese Medicine | 763,333,939.55 | 8.56% | 893,216,092.12 | 9.60% | -14.54% | | Other | 879,052,755.87 | 9.86% | 823,644,456.00 | 8.85% | 6.73% | Operating Revenue Composition (by Region) | By Region | Current Period Amount (RMB) | Proportion of Operating Revenue | Prior Year Period Amount (RMB) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Southwest Region | 6,980,539,042.97 | 78.30% | 7,512,610,889.22 | 80.74% | -7.08% | | South China Region | 891,528,365.15 | 10.00% | 883,040,445.67 | 9.49% | 0.96% | | North China Region | 479,204,744.09 | 5.38% | 462,068,606.92 | 4.97% | 3.71% | | East China Region | 73,719,432.77 | 0.83% | 68,530,318.24 | 0.73% | 7.57% | | Central China Region | 206,623,285.66 | 2.32% | 117,859,295.83 | 1.27% | 75.31% | | Other Businesses | 282,878,400.60 | 3.17% | 260,963,786.70 | 2.80% | 8.40% | IV. Non-Core Business Analysis During the reporting period, the company's non-core business primarily included investment income, asset impairment, non-operating income, and non-operating expenses. Investment income mainly stemmed from fixed deposits and losses from joint venture investments, asset impairment was primarily for inventory write-downs, non-operating income was mainly from natural disaster commodity claims, and non-operating expenses comprised routine non-operating expenditures and asset disposal write-offs Non-Core Business Analysis | Item | Amount (RMB) | Proportion of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 208,656.77 | 0.06% | Income recognized from fixed deposit purchases and investment losses recognized from equity method accounting for Baiyunshan in this period | Yes | | Asset Impairment | -62,915,146.39 | -19.55% | Provision for inventory write-down | Yes | | Non-Operating Income | 2,425,258.68 | 0.75% | Commodity claims received due to natural disasters | No | | Non-Operating Expenses | 5,108,456.21 | 1.59% | Other non-operating expenses and asset disposal write-offs incurred in this period | No | V. Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets decreased by 3.98% year-on-year, and net assets attributable to shareholders of the listed company decreased by 0.97%. Cash and equivalents and inventories decreased, while accounts receivable and construction in progress increased. On the liability side, short-term and long-term borrowings increased, while lease liabilities decreased. The fair value of financial assets measured at fair value at period-end was RMB 176,045,571.91, primarily comprising trading financial assets and other non-current financial assets. Total restricted assets at period-end amounted to RMB 749,377,781.65 Significant Changes in Asset Composition | Item | As of End of Current Period (RMB) | Proportion of Total Assets | As of End of Prior Year (RMB) | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Equivalents | 3,149,526,102.96 | 19.49% | 3,417,670,869.61 | 20.31% | -0.82% | | Accounts Receivable | 1,510,318,777.17 | 9.35% | 1,429,171,664.48 | 8.49% | 0.86% | | Inventories | 3,817,797,248.41 | 23.62% | 4,087,748,989.37 | 24.29% | -0.67% | | Construction in Progress | 83,170,815.55 | 0.51% | 35,786,313.07 | 0.21% | 0.30% | | Right-of-Use Assets | 2,649,778,675.09 | 16.40% | 2,974,652,839.75 | 17.67% | -1.27% | | Short-Term Borrowings | 549,782,538.66 | 3.40% | 495,565,917.00 | 2.94% | 0.46% | | Long-Term Borrowings | 121,566,427.26 | 0.75% | - | - | 0.75% | | Lease Liabilities | 1,327,648,742.12 | 8.22% | 1,530,737,074.38 | 9.10% | -0.88% | Assets and Liabilities Measured at Fair Value | Item | Period-End Amount (RMB) | | :--- | :--- | | Trading Financial Assets | 89,000,000.00 | | Investments in Other Equity Instruments | 4,000,000.00 | | Other Non-Current Financial Assets | 50,000,000.00 | | Financing for Accounts Receivable | 33,045,571.91 | | Total Above | 176,045,571.91 | Asset Restriction Status | Item | Period-End Carrying Value (RMB) | Reason for Restriction | | :--- | :--- | :--- | | Fixed Assets | 71,956,818.67 | Pledged for loans | | Other Cash and Equivalents | 677,420,962.98 | Bill deposits | | Total | 749,377,781.65 | | VI. Investment Analysis During the reporting period, the company's total investment was RMB 46.47 million, a significant year-on-year decrease of 83.95%. Key equity investments included Yunnan Chinese Herbal Medicine Agricultural and Sideline Products Co., Ltd., Yixintang Handcrafted Yunnan Catering Co., Ltd., Yixintang Pharmaceutical (Sichuan) Co., Ltd., and Yixintang Pharmaceutical (Henan) Co., Ltd. Raised funds were primarily allocated to the Chinese Herbal Medicine Decoction Pieces Capacity Expansion Project, Information Technology Construction Project, and Yixintang (Sichuan) Big Health Smart Pharmaceutical Base Phase I Logistics Center Project, with a cumulative investment of RMB 246.246 million, and some fund uses have been changed Investment Amount During the Reporting Period | Investment Amount (RMB) | Prior Year Period Investment Amount (RMB) | Change Rate | | :--- | :--- | :--- | | 46,470,000.00 | 289,610,000.00 | -83.95% | Significant Equity Investments Acquired During the Reporting Period | Investee Company Name | Business | Investment Method | Investment Amount (RMB) | Shareholding Ratio | | :--- | :--- | :--- | :--- | :--- | | Yunnan Guoyun Medicinal Materials International Trading Co., Ltd. | Chinese herbal medicine acquisition, agricultural and sideline product sales | Acquisition | 670,000.00 | 67.00% | | Yixintang Handcrafted Yunnan Catering Co., Ltd. | Catering services; food sales | Acquisition | 1,800,000.00 | 55.00% | | Yixintang Pharmaceutical (Sichuan) Co., Ltd. | Pharmaceutical retail, wholesale | Acquisition | 40,000,000.00 | 100.00% | | Yixintang Pharmaceutical (Henan) Co., Ltd. | Pharmaceutical retail, wholesale | Acquisition | 4,000,000.00 | 100.00% | | Total | | | 46,470,000.00 | | Overall Utilization of Raised Funds | Fundraising Year | Fundraising Method | Total Raised Funds (RMB 10,000) | Net Raised Funds (RMB 10,000) | Total Raised Funds Used in Current Period (RMB 10,000) | Cumulative Total Raised Funds Used (RMB 10,000) | Proportion of Raised Funds Used at Period-End | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2018 | Public Issuance of Corporate Bonds | 60,263.92 | 59,603.54 | 8,252 | 24,624.6 | 41.31% | Status of Projects Pledged with Raised Funds | Financing Project Name | Total Pledged Investment (RMB 10,000) | Adjusted Total Investment (RMB 10,000) | Amount Invested in Current Period (RMB 10,000) | Cumulative Investment as of Period-End (RMB 10,000) | Investment Progress as of Period-End | | :--- | :--- | :--- | :--- | :--- | :--- | | Chinese Herbal Medicine Decoction Pieces Capacity Expansion Project | 39,263.92 | 27,703.54 | 3,254.48 | 10,704.21 | 38.64% | | Information Technology Construction Project | 21,000 | 21,000 | 2,015.92 | 10,938.78 | 52.09% | | Yixintang (Sichuan) Big Health Smart Pharmaceutical Base Phase I Logistics Center Project (Phase I) | - | 10,900 | 2,981.6 | 2,981.6 | 27.35% | | Subtotal of Pledged Investment Projects | 60,263.92 | 59,603.54 | 8,252 | 24,624.6 | | - On November 26, 2024, the company's board of directors approved the 'Proposal on Changing the Use of Part of Raised Funds and Capitalizing Subsidiaries with Raised Funds to Implement Fundraising Projects,' agreeing to reallocate RMB 109 million from the 'Chinese Herbal Medicine Decoction Pieces Capacity Expansion Project' to implement the new 'Yixintang (Sichuan) Big Health Smart Pharmaceutical Base Phase I Logistics Center Project (Phase I)'[78][87] VIII. Analysis of Major Holding and Participating Companies This section analyzes the company's major holding and participating companies. Yunnan Hongxiang Traditional Chinese Medicine Technology Co., Ltd., a key subsidiary, achieved a net profit of RMB 33,395,989.51 during the reporting period. The company established three new subsidiaries and deregistered one to optimize its business layout Major Subsidiaries and Participating Companies with Over 10% Impact on Company's Net Profit | Company Name | Company Type | Main Business | Registered Capital (RMB) | Total Assets (RMB) | Net Assets (RMB) | Operating Revenue (RMB) | Operating Profit (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Yunnan Hongxiang Traditional Chinese Medicine Technology Co., Ltd. | Subsidiary | Production of Chinese Herbal Decoction Pieces | 40,000,000.00 | 2,009,850,743.49 | 1,270,992,554.62 | 362,555,119.26 | 33,380,047.88 | 33,395,989.51 | - During the reporting period, the company established one third-tier wholly-owned subsidiary, Yixintang Health Management (Kunming) Co., Ltd., one third-tier non-wholly-owned subsidiary, Yixintang Handcrafted Yunnan Catering Co., Ltd., and one fourth-tier non-wholly-owned subsidiary, Yunnan Yunshang Youpin E-commerce Co., Ltd[93] - During the reporting period, the company deregistered one wholly-owned third-tier subsidiary, Shanghai Kangjunge Wenpeng Traditional Chinese Medicine Clinic Co., Ltd[93] X. Risks Faced by the Company and Countermeasures The company faces multiple risks including drug safety and quality management, store expansion pitfalls, lease renewal, market competition, and changes in industry regulatory policies. To mitigate these, the company has established a stringent quality management system, implemented a 'chessboard' layout strategy, prioritized long-term lease agreements, integrated online and offline channels while enhancing professional services, and actively adapted to policy changes - The company faces drug safety and quality management risks, having established a three-tier quality management system, strictly implementing 'Good Supply Practice for Pharmaceutical Products,' and strengthening supplier audits and quality inspection processes[94] - The company faces potential risks from store expansion, addressing this by implementing a 'chessboard' layout strategy, formulating strict acquisition evaluation and integration plans, focusing on refined management, and optimizing the supply chain[95] - The company faces lease renewal risks, prioritizing long-term lease agreements, clarifying preferential renewal rights, and forming a chessboard-like network layout to reduce the importance of individual stores[96] - The company faces market competition risks, addressing them by integrating offline store networks with online sales channels, strengthening professional service capabilities and business model innovation, and building an omni-channel service system[97] - The company faces risks from changes in industry regulatory policies, such as mandatory electronic prescriptions for dual-channel pharmacies, requiring continuous policy adaptation and strengthened compliance management[98] Corporate Governance, Environment, and Society This section details the company's corporate governance structure, including board and management changes, profit distribution, employee incentives, environmental disclosures, and social responsibility initiatives I. Changes in Directors, Supervisors, and Senior Management This section states that there were no changes in the company's directors, supervisors, and senior management during the reporting period, with details available in the 2024 annual report - There were no changes in the company's directors, supervisors, and senior management during the reporting period, with details available in the 2024 annual report[100] II. Profit Distribution and Capital Reserve Conversion to Share Capital in This Reporting Period The company's board of directors approved the 2025 semi-annual profit distribution plan, proposing a cash dividend of RMB 2 (tax inclusive) per 10 shares to all shareholders, with no bonus shares or capital reserve conversions to share capital. The total estimated cash dividend is **RMB 114,825,645.0