THDB(SH:600867) Chang Jiang Shang Bao·2025-05-26 02:27Core Viewpoint - Tonghua Dongbao is undergoing a financial crisis and is liquidating assets by reducing its stake in TEBIO to raise funds for innovative drug development, amidst declining profits and increasing operational costs [1][2][16]. Financial Performance - In Q1 2024, Tonghua Dongbao reported a net profit decline of over 49%, marking the first annual loss in its history [2][19]. - The company's revenue for 2024 is projected to be 20.10 billion yuan, a decrease of 34.66% year-on-year, with a net loss of 0.43 billion yuan [16][18]. - The gross margin for insulin products has decreased, while sales and management expenses have risen, contributing to the decline in performance [3][19]. Asset Liquidation - The company plans to transfer 5.70% of its stake in TEBIO for approximately 13 billion yuan, which is about 20% lower than the market price [6][7][8]. - This transfer is part of a series of asset liquidations, with previous sales totaling around 12.80 billion yuan, reducing its stake in TEBIO to 16.03% [12][13][14]. Debt and Financial Pressure - As of Q1 2024, Tonghua Dongbao has 688 million yuan in cash and 790 million yuan in interest-bearing debt, indicating a tight liquidity position [4][8]. - The major shareholder, Dongbao Industrial Group, has a high equity pledge rate of 91.64%, reflecting its financial strain [4][23]. Market Position and Future Outlook - Despite the current challenges, Tonghua Dongbao remains a leading player in the domestic insulin market, with a history of strong performance [16]. - The company has secured a significant share of the national insulin procurement, but profit margins are expected to remain under pressure due to price reductions [18][19].