HONZ(SZ:300086) Sou Hu Cai Jing·2025-07-30 16:13Core Viewpoint - The recent rise in confirmed cases of chikungunya fever in China has led to a surge in the "mosquito control concept" in the capital market, benefiting companies like Kangzhi Pharmaceutical, despite the company facing significant operational challenges [2][3]. Financial Performance - Kangzhi Pharmaceutical has experienced significant volatility in its financial performance, alternating between profits and losses. In 2021, the company reported a net profit of 0.11 billion yuan, which plummeted to a loss of 1.88 billion yuan in 2022. A brief recovery in 2023 saw a profit of 0.12 billion yuan, but 2024 marked a new low with a net loss of 2.16 billion yuan [3][4]. - The company's total revenue for 2024 was 4.73 billion yuan, a decrease of 36.07% year-on-year, which is lower than both 2023 and even 2017 levels. The net profit margin saw a drastic decline of 1975.20% year-on-year [3][4]. Revenue Breakdown - The main revenue sources for Kangzhi Pharmaceutical include children's medicine, adult medicine, and maternal and infant health products, which together account for 93% of total revenue. In 2024, all three product lines experienced significant declines, with children's medicine revenue down 35.25%, adult medicine down 44.08%, and maternal and infant health products down 30.37% [4][6]. Cost Management Issues - The company attributed its revenue decline to inventory destocking in cold and respiratory products and a drop in terminal sales. Despite a significant revenue drop, sales expenses increased by 23.39% to 2.63 billion yuan, constituting 55.56% of total revenue. Management expenses also reached 1.17 billion yuan, nearly a quarter of total revenue, exacerbating profitability pressures [6][7]. Management Compensation Concerns - In 2024, the average salary for employees at Kangzhi Pharmaceutical decreased by 6.01% to 120,472.51 yuan, while management compensation increased by 7.96% to 4.0888 million yuan. This disparity has raised concerns about the fairness of the compensation structure during a period of losses [7][8]. Future Outlook - In early 2025, Kangzhi Pharmaceutical showed signs of a short-term recovery, with Q1 revenue of 1.12 billion yuan, a year-on-year increase of 7.33%. However, this improvement was primarily due to a 44.63% reduction in sales expenses rather than organic growth in core business operations [10]. - The company reported asset impairment losses of 59.5275 million yuan in 2024, significantly impacting profitability. The ongoing losses from subsidiaries and the potential for further asset impairments due to delayed asset repurchase agreements pose additional risks to financial stability [11][12][13].