JZYY(SH:600750) Xin Lang Cai Jing·2025-08-23 00:25Core Viewpoint - The company demonstrates resilience in a challenging OTC market, with a focus on growth in health consumer products and prescription drugs, while maintaining strong profitability and cash flow [1][2][3]. Group 1: Company Performance - In the first half of 2025, the company reported revenues of 2.14 billion yuan, a decrease of 6% year-on-year, while net profit attributable to shareholders increased by 6% to 520 million yuan [1]. - The second quarter of 2025 saw revenues of 960 million yuan, down 4% year-on-year, but net profit attributable to shareholders rose by 6% to 240 million yuan [1]. - The decline in revenue is primarily attributed to changes in OTC demand, but the company has optimized costs and expenses, leading to improved profitability [1]. Group 2: Industry Context - The pharmaceutical manufacturing industry in China faced a 1.2% decline in revenue and a 2.8% drop in profit in the first half of 2025 [2]. - OTC revenue for the company fell by 10% year-on-year to 1.55 billion yuan, while health consumer products grew by 17% to 230 million yuan, and prescription drug revenue increased by 7% to 360 million yuan [2]. Group 3: Profitability and Cash Flow - The gross margin for the first half of 2025 was 66.6%, a decrease of 2.4 percentage points year-on-year, mainly due to a lower proportion of high-margin OTC business [3]. - The company maintained a weighted average return on equity of 12.89%, an increase of 1.02 percentage points year-on-year, indicating sustained improvement in profitability [3]. - Operating cash flow net amount was 650 million yuan, while investment cash flow net amount was -330 million yuan, reflecting stable cash flow management [3]. Group 4: Dividend Policy - The company plans to distribute a cash dividend of 0.5 yuan per share, representing 60.78% of the net profit attributable to shareholders for the first half of 2025 [4]. - The company emphasizes high shareholder returns, maintaining a policy of two cash dividend distributions annually during the 14th Five-Year Plan period [4]. Group 5: Investment Outlook - The company maintains a profit forecast, expecting net profits attributable to shareholders of 897 million yuan, 1.015 billion yuan, and 1.145 billion yuan for 2025-2027, representing year-on-year growth of 14%, 13%, and 13% respectively [5]. - A target price of 29.96 yuan is set based on a 21x PE ratio for 2025, maintaining a "buy" rating [5].