TRT(SH:600085) Sou Hu Cai Jing·2025-04-09 07:12Core Viewpoint - Tong Ren Tang's 2024 annual report indicates a revenue increase of 4.12% to 18.597 billion yuan, but a decline in net profit by 8.54% to 1.526 billion yuan, highlighting a divergence between revenue growth and profitability [3][4] Financial Performance - The company's gross profit margin decreased by 7.04% to 43.96%, indicating a decline in profitability [3] - Operating costs rose by 10.7%, with raw material costs increasing by 23.07% to 4.476 billion yuan, primarily due to rising prices of traditional Chinese medicine materials [4] ESG Performance - Tong Ren Tang has made significant achievements in governance, environmental management, and social contributions, with a board comprising 11 members, including 4 independent directors and 6 female directors [3] - The company has integrated ESG risks into its overall risk management framework, identifying 25 ESG-related issues [4] Raw Material Management - The company adheres to a "local sourcing and seasonal harvesting" philosophy, collaborating with cooperatives and farmers to ensure the quality of raw materials [7] - The price of a key ingredient, natural cow bile, surged from 570,000 yuan/kg in early 2023 to 1.65 million yuan/kg by June 2024, significantly impacting product pricing [4] Climate Risks and Opportunities - Tong Ren Tang recognizes climate-related risks affecting raw material supply, including environmental factors and extreme weather events, and has established emergency response plans [5] - The company aims to reduce operational costs through energy-saving technologies and efficient resource management [5] Brand Image and Quality Concerns - The mercury contamination incident involving the company's product "Ren Dan" has raised consumer trust issues, with mercury levels reported at 9,729.985 mg/kg, far exceeding the standard [9][10] - The company has acknowledged the importance of product quality and safety as a key issue in its ESG risk management [11] Brand Management - Recent brand misuse incidents have prompted the company to enhance its brand value and cultural significance, especially after acquiring a controlling stake in Tianjin Tong Ren Tang [13]