ZHONGSHENGYAOYE(SZ:002317) Zheng Quan Zhi Xing·2025-08-29 22:41Core Viewpoint - The recent financial report of Zhongsheng Pharmaceutical (002317) shows a decline in total revenue but a significant increase in net profit, indicating improved profitability despite challenges in revenue generation [1]. Financial Performance - Total revenue for the first half of 2025 was 1.3 billion yuan, a decrease of 4.74% year-on-year [1]. - Net profit attributable to shareholders reached 188 million yuan, an increase of 114.96% year-on-year [1]. - In Q2 2025, total revenue was 665 million yuan, down 7.99% year-on-year, while net profit was 105 million yuan, up 191.52% year-on-year [1]. - Gross margin improved to 58.07%, up 2.01% year-on-year, and net margin increased to 14.22%, up 146.1% year-on-year [1]. - Total operating expenses (selling, administrative, and financial) amounted to 501 million yuan, accounting for 38.57% of revenue, an increase of 1.96% year-on-year [1]. - Earnings per share rose to 0.22 yuan, a 120% increase year-on-year, while operating cash flow per share decreased to 0.05 yuan, down 81.31% year-on-year [1]. Business Model and Market Position - The company relies heavily on a marketing-driven business model, which may indicate underlying vulnerabilities in its operational structure [3]. - Historical data shows a median Return on Invested Capital (ROIC) of 7.95% over the past decade, with two years of losses since its IPO, suggesting a relatively weak investment return profile [3]. Clinical Development - The company is advancing its RAY1225 injection, a novel GLP-1 receptor agonist, which has shown promising results in Phase II clinical trials for obesity and type 2 diabetes [5][6]. - In the REBUILDING-1 trial, participants receiving RAY1225 showed significant weight loss compared to the placebo group, with weight reductions of up to 15.05% in the highest dosage group [5]. - The SHINING-1 trial demonstrated a significant reduction in HbA1c levels among type 2 diabetes patients treated with RAY1225, outperforming the placebo group [6]. - The safety profile of RAY1225 appears favorable, with low risks of hypoglycemia and mostly mild gastrointestinal side effects [6]. Investment Interest - The company has attracted attention from notable fund managers, with one prominent manager increasing their stake in the company [3][4]. - The largest fund holding Zhongsheng Pharmaceutical is the Xingquan Hefeng Three-Year Holding Mixed Fund, which has shown significant performance over the past year [4].