DRTG(SH:600329) Xin Jing Bao·2025-07-19 01:00Core Viewpoint - The company DaRenTang is experiencing significant fluctuations in its financial performance, primarily due to the sale of its stake in Tianjin Shike, which has historically been a major source of profit. However, the company is facing challenges with declining revenue and quality control issues in its core business operations [1][4][9]. Financial Performance - DaRenTang expects a net profit attributable to shareholders of 1.84 billion to 2 billion yuan for the first half of 2025, representing a year-on-year increase of 180% to 204% [1]. - The net profit excluding non-recurring gains is projected to be 560 million to 620 million yuan, reflecting a decrease of 12% to 2% year-on-year [1]. - The substantial increase in net profit is mainly due to the sale of its stake in Tianjin Shike, which generated a post-tax profit of 1.31 billion yuan [1][5]. Stake Sale Details - DaRenTang sold 13% of its stake in Tianjin Shike to Haleon (China) for 1.759 billion yuan, completing the transaction by the end of December 2024 [2]. - In April 2025, the company announced the sale of an additional 4.6% and 7.4% stakes in Tianjin Shike for 622 million yuan and 1 billion yuan, respectively, completing the transactions by June 2025 [3]. Revenue Decline - The company has reported a continuous decline in revenue over the past two years, with revenues of 8.222 billion yuan, 7.307 billion yuan, and 1.455 billion yuan for 2023, 2024, and the first quarter of 2025, respectively, indicating year-on-year declines of 0.33%, 11.14%, and 30.22% [6]. - In 2024, the net profit excluding non-recurring gains fell by 21.62% to 746 million yuan, with both major business segments experiencing revenue declines [6]. Product Performance - Among the top ten products, eight experienced varying degrees of sales decline in 2024, with significant drops in sales volume for key products such as Jingwanhong Ointment and Qingfei Xiaoyan Wan [7]. - The inventory levels for several products surged dramatically, indicating potential overproduction or reduced demand [7]. Quality Control Issues - DaRenTang has faced multiple regulatory penalties related to drug production quality and compliance issues, including fines and warnings from authorities such as the FDA [9]. - The company has received numerous consumer complaints regarding product quality and service, highlighting ongoing challenges in maintaining standards [9]. Strategic Adjustments - In response to declining performance, DaRenTang has divested from its commercial business by transferring its stake in Tianjin Zhongxin Pharmaceutical Co., Ltd. to focus on core operations [8].