Youcare Pharmaceutical (SH:688658) 智通财经网·2026-01-08 08:59Core Viewpoint - The company Yuyuan Pharmaceutical is accelerating its listing process in Hong Kong amid a challenging transition period, facing declining revenues and profits while attempting to pivot from generic drugs to innovative pharmaceuticals [4][12]. Group 1: Company Overview - Yuyuan Pharmaceutical, established in 2001, initially focused on chemical generics and achieved significant market penetration with products like Yuyuan Tong and Liweike, which contributed over 60% of its revenue at peak [5]. - The company is now facing pressure from the dual transformations of normalized centralized procurement and accelerated innovation, leading to a strategic shift towards innovative drug development [6]. Group 2: Financial Performance - Revenue has declined from 45.21 billion RMB in 2022 to 37.67 billion RMB in 2024, with a significant drop of 39.4% to 13.04 billion RMB in the first seven months of 2025 [8][9]. - Net profit has decreased from 339 million RMB in 2022 to 121 million RMB in 2024, with a net loss of 146 million RMB reported in the first seven months of 2025 [9]. - The gross margin has also fallen from 63.5% to 45.7%, indicating a continuous weakening of profitability [9]. Group 3: Challenges and Strategic Decisions - The core product Yuyuan Tong is experiencing a decline in both price and sales volume due to intensified market competition and policy changes, leading to a significant reduction in cardiovascular business revenue [10]. - The company’s cash flow situation has worsened, with cash and cash equivalents dropping to 875 million RMB, a 30% decrease from the end of 2024, and negative operating cash flow recorded at -27.32 million RMB [11]. - Despite declining performance, the company distributed over 890 million RMB in dividends from 2022 to 2024, raising concerns about the sustainability of such payouts during a critical transition period [11]. Group 4: IPO and Future Prospects - Yuyuan Pharmaceutical plans to raise funds through its IPO to support innovative drug development, production facility construction, and operational capital, addressing current financial pressures [13]. - The favorable market conditions in the Hong Kong stock market for biopharmaceuticals in 2025 provide a strategic window for the company to enhance its valuation and brand influence [14]. - The success of the IPO hinges on the approval and commercialization of its innovative drug pipeline, including three innovative traditional Chinese medicines and advancements in oligonucleotide and mRNA therapies [16].