Sinotherapeutics (SH:688247) Shang Hai Zheng Quan Bao·2026-01-29 19:19Summary of Key Points Core Viewpoint The company, Shanghai Xuantai Pharmaceutical Technology Co., Ltd., announced a significant impairment provision for the fiscal year 2025, reflecting a cautious approach to its financial reporting and asset valuation, which will impact its profitability. Group 1: Impairment Provision Overview - The company has recognized a total impairment loss of RMB 19.0554 million for the year ending December 31, 2025, including a reversal of impairment losses amounting to RMB 0.0632 million [2][6]. - The impairment provisions are in accordance with the relevant accounting standards and are aimed at providing a true and fair view of the company's financial status [6]. Group 2: Breakdown of Impairment Losses - Credit impairment losses amounted to RMB 1.4530 million, assessed based on expected credit losses for accounts receivable and other receivables [3]. - Inventory impairment losses were recorded at RMB 15.4378 million, primarily due to a decline in the net realizable value of certain raw materials and finished products influenced by market competition [3]. - Goodwill impairment losses totaled RMB 2.1646 million, determined through recoverable amount testing of goodwill [4]. - A reversal of impairment losses on contract assets was recorded at RMB 0.0632 million [5]. Group 3: Impact on Financial Performance - The total impairment provisions will reduce the company's consolidated profit before tax by RMB 18.9922 million for the fiscal year 2025 [6]. - The company emphasizes that these provisions align with accounting standards and reflect its actual financial situation, ensuring the reliability of its financial information [6]. Group 4: Performance Forecast for 2025 - The company anticipates a revenue range of RMB 393.83 million to RMB 472.60 million for 2025, representing a decrease of RMB 39.0193 million to RMB 117.7893 million, or a decline of 7.63% to 23.02% compared to the previous year [11]. - The projected net profit attributable to shareholders is expected to be between RMB 45.07 million and RMB 54.08 million, a decrease of RMB 73.6206 million to RMB 82.6306 million, translating to a decline of 57.65% to 64.71% year-on-year [11]. - The net profit after deducting non-recurring gains and losses is forecasted to be between RMB 29.61 million and RMB 35.53 million, down by RMB 78.4360 million to RMB 84.3560 million, or a drop of 68.82% to 74.02% compared to the previous year [11]. Group 5: Reasons for Performance Decline - The decline in net profit is attributed to the ongoing domestic drug procurement policies leading to significant price reductions for some products, thereby narrowing profit margins [15]. - Increased competition in overseas markets and adjustments in tariff policies have also negatively impacted sales and profitability [15]. - The company has prudently recognized impairment losses on receivables, inventory, and goodwill, further affecting the current net profit [16].