Youcare Pharmaceutical (SH:688658) Xin Lang Cai Jing·2025-07-28 10:42Core Viewpoint - The stock price of Yuekang Pharmaceutical has experienced significant volatility, dropping over 20% after a major shareholder's shares were auctioned, followed by a rapid increase of 72.68% within three weeks due to market speculation and subsequent auctions [2][3] Financial Performance - In Q1 2025, Yuekang Pharmaceutical reported a 40.35% year-on-year decline in revenue, continuing a trend of decreasing profits with a net profit drop of 33% in 2024 [3][5] - The company's revenue for the full year 2024 was 37.81 billion yuan, down 9.90% from the previous year, with core product revenues from cardiovascular and anti-infection categories declining by 20.73% and 22.67% respectively [6] - The company has faced three consecutive years of declining performance, with a 44.78% drop in net profit in 2024 [6] Product Dependency and Market Challenges - The core product, Ginkgo biloba extract injection, previously contributed over 70% of the company's revenue but has faced pricing pressures leading to a 20.73% revenue decline [4][9] - The company opted out of hospital procurement markets to avoid further price drops, resulting in a significant reduction in sales volume [4][9] Debt and Legal Issues - The major shareholder is embroiled in legal disputes, which have led to the auction of 26.5 million shares, reflecting deeper financial troubles within the company [7][8] - As of the end of 2024, the company had 6 billion yuan in cash but also 6.9 billion yuan in interest-bearing debt, indicating a precarious financial position [6][9] Strategic Transition and R&D Challenges - Since its IPO in 2020, the company has been attempting to shift towards innovative drug development, increasing R&D investment from 2.94% in 2019 to 11.16% in 2024 [9][10] - However, several R&D projects have faced delays and cancellations, highlighting challenges in transitioning from traditional to innovative business models [10]