Xin Lang Cai Jing·2025-09-02 12:16Core Viewpoint - YXTT Pharmaceutical Group held an investor meeting to discuss its mid-year performance and future strategies, highlighting challenges and ongoing transformations in its business model [1][2]. Financial Performance - In the first half of 2025, YXTT reported revenue of 8.914 billion, a year-on-year decline of 4.2%. Retail revenue decreased by over 2 percentage points, while distribution and traditional Chinese medicine segments faced significant declines due to proactive business adjustments [2]. - Net profit experienced a double-digit decline influenced by tax advisory for 2023-2024 and the current operating environment, although historical tax risks have been resolved, reducing uncertainty [2]. - Cash flow remains healthy, with only the subsidiary Sichuan Bencao Tang having bank loans, while other subsidiaries have no interest-bearing debts, maintaining a healthy asset-liability ratio [2]. Business Transformation and Strategy - YXTT is advancing its store transformation, with nearly one-third of its stores adding medical attributes, and over 400 stores have been modified by the end of August 2025. The goal is to complete 1,000 store modifications by the end of 2025 [3]. - Digital transformation is being prioritized, with a dedicated department in Chengdu focusing on systematic product and service development to achieve deep digital management [3]. - The company is increasing R&D investment in traditional Chinese medicine, focusing on food-medicine homology and standardized products [3]. Future Planning and Outlook - A strategic review is planned for October-November 2025 to outline the development strategy for the next 3-5 years, with ongoing store modifications aimed at improving operational efficiency [4]. - The company is addressing the impact of medical insurance policies on prescription drug sales in Yunnan and Sichuan by exploring new regions and expanding non-drug categories [4]. - The company aims for non-drug sales to reach 40% of total sales in the next 3-5 years, with rapid progress in store modifications in provinces outside of its home region [4].