Core Viewpoint The Guangdong Jiaying Pharmaceutical Co., Ltd. is preparing for its 2024 Annual General Meeting, focusing on various proposals including financial reports, profit distribution plans, and corporate governance matters. Group 1: Meeting Details - The meeting is scheduled for May 16, 2025, at 14:30 in Meizhou, Guangdong Province [5] - Attendees will include shareholders, company directors, supervisors, senior management, and invited guests [5] Group 2: Proposals for Review - Proposal 1: Review of the 2024 Annual Report and its summary [6] - Proposal 2: Review of the 2024 Financial Settlement Report, audited by Zhonghua Accounting Firm [7] - Proposal 3: Profit distribution plan for 2024, which proposes no cash dividends or stock bonuses [9][11] - Proposal 4: Review of the 2024 Board of Directors' Work Report, highlighting operational achievements and challenges [14] - Proposal 5: Review of the 2024 Supervisory Board's Work Report, detailing compliance and oversight activities [32] - Proposal 6: Confirmation of 2024 director remuneration and proposal for 2025 remuneration [36] - Proposal 7: Request for a comprehensive credit limit of up to RMB 200 million from banks for operational needs [37] - Proposal 8: Review of daily related party transactions for 2024 and projections for 2025 [40] Group 3: Financial Performance and Strategy - The company reported a net profit of RMB 16,346,842.23 for 2024, with no cash dividends proposed due to financial constraints and strategic investments [9][11] - The company aims to enhance its product portfolio and reduce reliance on a single product line, particularly in response to market fluctuations affecting its main products [11][12] - The company plans to invest in research and development to diversify its offerings and improve market competitiveness [29][30] Group 4: Corporate Governance and Compliance - The company has established a robust internal control system to ensure compliance with laws and regulations, maintaining transparency and protecting shareholder interests [33][35] - The Supervisory Board has actively monitored the company's operations, ensuring adherence to legal and regulatory standards [32][34]

Industry Overview - The pharmaceutical industry is a strategic pillar for national health and economic development, increasingly gaining public and government attention [2][3] - The demand for healthcare is experiencing rigid growth due to economic development, improved living standards, and demographic changes [2] Company Performance - In Q1 2025, the company reported a revenue increase of 27.83% year-on-year, amounting to 27.22 million yuan, and a net profit increase of 197.23%, totaling 10.22 million yuan [3][12] - The growth is attributed to expanded sales channels and successful partnerships with major chain pharmacies [3][12] Product and Market Strategy - The company specializes in the research, production, and sales of traditional Chinese medicine (TCM), focusing on stable and effective formulations [3][5] - The company has over 70 approved products across various categories, including throat, cold, orthopedics, and gynecology [9][11] - The company is adapting to the normalized centralized procurement model, which has covered over 20 product groups and 95 varieties [3][5] Internal Control and Compliance - The company emphasizes internal control and compliance, enhancing management through dedicated personnel and electronic process controls [12] - Recent improvements include the establishment of a compliance culture and the introduction of a multi-tiered governance mechanism [12] Future Outlook - The company plans to leverage its "Guangdong Old Brand" title to enhance brand recognition and expand market share through strategic partnerships [12] - The focus will be on optimizing product structure and enhancing clinical and scientific value to improve market positioning [7][12] Financial Health - As of Q1 2025, the company reported total assets of 812.64 million yuan and a low debt-to-asset ratio of 10.89%, indicating strong liquidity [12]

Core Viewpoint - The company reported a decline in Q1 2025 revenue and net profit, but anticipates a recovery in performance in subsequent quarters through strategic initiatives and brand development [1][2]. Financial Performance - Q1 2025 revenue reached 1.608 billion yuan, a year-over-year decrease of 16.53% - Net profit attributable to shareholders was 90 million yuan, down 31.06% year-over-year - Non-recurring net profit was 72 million yuan, reflecting a 36.16% year-over-year decline [1]. Strategic Initiatives - The company is accelerating integration with China Resources Sanjiu to reshape its sales model, facing short-term pressures due to retail pharmacy consolidation and other factors [2]. - There is an emphasis on enhancing channel efficiency, terminal coverage, and brand product penetration, leveraging major products to drive performance recovery [2]. Brand Development - The company focuses on the "Kunzhong Medicine 1381" brand strategy, concentrating on key products like Shenling Baizhu Powder and Shugan Granules, utilizing a comprehensive media approach for brand positioning [2]. - The "Four Strengths Construction" initiative is aimed at improving terminal coverage and sales performance [2]. Academic and Product Development - The company has received awards for its research projects in collaboration with China Resources, laying a foundation for developing major traditional Chinese medicine products [2]. - The company is committed to enhancing its product offerings and brand identity in the chronic disease management sector, responding to market pressures [2]. Profit Forecast - Revenue projections for 2025-2027 are 8.969 billion, 10.076 billion, and 11.326 billion yuan, with year-over-year growth rates of 6.75%, 12.34%, and 12.41% respectively - Net profit forecasts for the same period are 717 million, 865 million, and 1.043 billion yuan, with growth rates of 10.63%, 20.68%, and 20.54% respectively - The current price-to-earnings ratios are projected at 16, 13, and 11 times [3].

Core Viewpoint - The State Council's recent document aims to enhance the quality of traditional Chinese medicine (TCM) and promote high-quality development in the TCM industry, which is expected to benefit leading companies in the sector as policies are refined and implemented [1][2]. Group 1: Industry Development - The document emphasizes strengthening the TCM industry chain and optimizing the industrial structure, which is likely to accelerate the pace of mergers and acquisitions among leading companies [2]. - It encourages strategic mergers, resource integration, and the cultivation of specialized small and medium-sized enterprises in the TCM field, aiming to enhance the competitiveness of leading companies [2]. - A full industry chain layout is expected to ensure stable and high-quality supply of raw materials while reducing costs, potentially increasing gross and net profit margins [2]. Group 2: Clinical Value and Innovation - The document highlights the importance of clinical value assessment, which is expected to help high-quality TCM products stand out and promote innovation in TCM [2]. - It proposes a "three-in-one" registration system for TCM, combining TCM theory, human experience, and clinical trials, to enhance the clinical evidence of TCM products [2]. - The acceleration of new drug reviews for TCM is anticipated to lead to a faster market entry for innovative TCM products, with a significant increase in approvals noted in early 2025 compared to the previous year [3]. Group 3: Procurement Policy - The document outlines plans to optimize the centralized procurement policies for TCM, aiming for high quality at competitive prices [3]. - Ongoing pilot programs for centralized procurement of traditional Chinese medicine are expected to evolve, with clearer guidelines on price reductions and quality improvements anticipated by 2025 [3].