Chase Sun(SZ:300026) Tai Mei Ti A P P·2025-10-30 00:50Core Viewpoint - Hongri Pharmaceutical is experiencing significant declines in both revenue and profit, raising concerns in the investment market about its future performance and management strategies [1][2][9]. Financial Performance - In 2024, Hongri Pharmaceutical reported an operating income of 5.783 billion yuan, a year-on-year decrease of 5.34%, and a net profit attributable to shareholders of 21.47 million yuan, down 95.76% [1]. - For the first three quarters of 2025, the company recorded an operating income of 4.149 billion yuan, a decline of 6.59%, and a net profit of 80.76 million yuan, down 52.03% [1][2]. - The company's non-recurring net profit turned negative, with a loss of 760.71 million yuan in 2024 and a decrease of 43.81% in the first three quarters of 2025 [1][2][3]. Cost Management Efforts - Hongri Pharmaceutical has implemented cost-cutting measures, resulting in a 7.35% reduction in sales expenses, a 0.73% decrease in management expenses, a 13.87% reduction in R&D expenses, and a 64.26% decrease in financial expenses for the first three quarters of 2025 [3]. Product Portfolio and Market Position - The company operates in various sectors, including traditional Chinese medicine (TCM) granules, finished pharmaceuticals, medical devices, and healthcare services, with a primary revenue source from the TCM segment [4]. - Key products include TCM granules and Xuebijing injection, which has been recognized for its efficacy in treating sepsis [4][5]. Market Challenges - The TCM granule market is highly competitive, with major players including China Traditional Chinese Medicine, Huaren Sanjiu, and others, leading to intensified competition due to policy relaxations and market expansions [7]. - Price fluctuations from centralized procurement initiatives have impacted profit margins for TCM products, with significant collective procurement efforts affecting the market [7][8]. Investor Sentiment and Management Response - Investors have expressed concerns regarding the company's prolonged stock price stagnation and declining performance over four consecutive years, questioning the clarity of its management and R&D strategies [9]. - The company's management has outlined a strategy focused on innovation, integration, and market adaptation, but the lack of tangible results raises skepticism about its effectiveness [10].