Core Viewpoint - The recent price adjustment announcement by the Zhejiang Provincial Medical Insurance Bureau has put the phosphoric acid oseltamivir capsules produced by several pharmaceutical companies, including Dongyangguang Pharmaceutical, under scrutiny, impacting the company's path to a Hong Kong listing [2][3]. Company Overview - Dongyangguang Pharmaceutical's core product, "Kewai" phosphoric acid oseltamivir, once held a 90% market share in China but is now facing significant challenges due to intensified market competition and price complaints [3][4]. - The company reported a 10% decline in its domestic market revenue share for phosphoric acid oseltamivir in 2024, with profits plummeting by 97.6% year-on-year [3][9]. Financial Performance - The revenue from "Kewai" phosphoric acid oseltamivir accounted for 81.2%, 86.9%, and 64.2% of Dongyangguang's total revenue from 2022 to 2024, indicating a heavy reliance on this single product [9][12]. - The company's financial results showed operating profits of -7.93 billion RMB in 2022, 17.66 billion RMB in 2023, and 3.81 billion RMB in 2024, with net profits of -14.16 billion RMB, 10.14 billion RMB, and 2.48 million RMB respectively [9][10]. Market Dynamics - The overall market for antiviral drugs in China is projected to reach 6.7 billion RMB in 2024, with over 120 companies producing flu medications, leading to increased competition for Dongyangguang [7][8]. - The introduction of new antiviral drugs, such as Marbalozav, has further eroded the market share of Dongyangguang's oseltamivir, which is now at 54.8%, down from 64.8% in 2023 [7][8]. Strategic Initiatives - In response to the challenges, Dongyangguang is pursuing diversification in its product offerings, focusing on innovative drug development across various therapeutic areas, including diabetes and oncology [12][13]. - The company aims to consolidate its sales channels through a merger with its subsidiary, Dongyangguang Changjiang Pharmaceutical, to enhance its market position and operational efficiency [13][14].