China Meheco(SH:600056) Mei Ri Jing Ji Xin Wen·2025-12-27 16:00Core Viewpoint - The investigation of Gao Yuwen, former chairman of China National Pharmaceutical Group Co., Ltd. (China Pharmaceutical), highlights ongoing corruption issues within the company, which has seen a significant decline in performance over recent years despite leadership changes. Group 1: Leadership and Governance - Gao Yuwen served as chairman for approximately three years and was the highest-ranking official investigated among over ten executives scrutinized in recent anti-corruption efforts [2][3] - Since 2016, China Pharmaceutical has experienced five chairmen, indicating instability in leadership without corresponding improvements in company performance [8][9] Group 2: Financial Performance - In the first three quarters of this year, China Pharmaceutical reported a net profit of approximately 455 million yuan, marking a decline of 4.64% year-on-year and the lowest level in nearly a decade [11][12] - The company's total revenue for the same period was 25.894 billion yuan, down 3.42% year-on-year, continuing a trend of revenue decline for two consecutive years [11][12] Group 3: Market Challenges - The company faces ongoing challenges from policies such as volume-based procurement and medical insurance cost control, which have pressured profit margins [11] - International trade revenue decreased by nearly 20% year-on-year, attributed to the impact of domestic substitution policies [11] Group 4: Strategic Initiatives - To address performance issues, the company is focusing on transformation and innovation, with planned R&D investments of 276 million yuan and 346 million yuan for 2023 and 2024, respectively [11] - The company has significantly reduced sales expenses from 2.485 billion yuan in 2020 to 1.099 billion yuan in 2024 as part of its compliance efforts [11] Group 5: Goodwill and Acquisitions - Previous acquisitions aimed at expanding the pharmaceutical commercial sector have resulted in goodwill risks, with a goodwill impairment loss of approximately 128 million yuan anticipated for 2024 [12] - As of the first three quarters of this year, the company's goodwill balance stood at 996 million yuan, compared to a net profit of 535 million yuan last year [12]