Zhendong Pharmacy(SZ:300158) Zheng Quan Zhi Xing·2025-08-25 22:24Core Insights - The core viewpoint of the article highlights the significant decline in the financial performance of Zhendong Pharmaceutical, with a notable drop in net profit and revenue for the first half of 2025 compared to the previous year [1] Financial Performance Summary - Zhendong Pharmaceutical reported a total revenue of 1.457 billion yuan for the first half of 2025, a decrease of 3.3% year-on-year [1] - The net profit attributable to shareholders was 7.9313 million yuan, reflecting a substantial decline of 74.13% year-on-year [1] - The gross margin improved to 51.15%, an increase of 3.26% year-on-year, while the net margin fell to 0.45%, a decrease of 76.07% [1] - Total expenses (selling, administrative, and financial) amounted to 654 million yuan, accounting for 44.9% of revenue, which is an increase of 4.24% year-on-year [1] - Earnings per share dropped to 0.01 yuan, down 74.16% year-on-year, and operating cash flow per share was -0.4 yuan, a decrease of 1205.75% [1] Cash Flow and Financial Metrics - The financial expenses saw a significant increase of 100.48% due to reduced interest income [3] - The net cash flow from operating activities decreased by 1177.57%, primarily due to compensation payments [3] - The net cash flow from investing activities increased by 338.63%, attributed to reduced cash payments for investments [3] - The net cash flow from financing activities increased by 51.11%, due to decreased funds for loan repayments and share buybacks [3] Business Evaluation - The company's historical financial performance has been weak, with a median Return on Invested Capital (ROIC) of 3% over the past decade, and a particularly poor ROIC of -30.18% in 2024 [4] - The company has reported losses in four out of its fourteen annual reports since going public, indicating a generally unfavorable investment profile [4] Business Model Insights - The company's performance is primarily driven by marketing efforts, necessitating a thorough examination of the underlying factors influencing this drive [5]