Core Viewpoint - 易明医药's 2024 annual report indicates a significant increase in net profit despite a decline in revenue, highlighting the company's challenges in market competition and reliance on non-recurring gains [1][5]. Revenue Performance - In 2024, 易明医药 achieved total revenue of 6.52 billion, a decrease of 2.27% year-on-year, marking the second consecutive year of revenue decline [4]. - The revenue in 2023 was 6.67 billion, reflecting a more substantial decline of 22.14% compared to 2022 [4][2]. Profitability Analysis - The net profit attributable to 易明医药 in 2024 was 0.46 billion, representing a substantial increase of 198.50% year-on-year [1][5]. - The non-recurring net profit was 18.45 million, showing a remarkable growth of 1579.33% compared to the previous year's 1.10 million, indicating a reliance on non-operating income for profit growth [5]. Market Challenges - The decline in revenue signals significant pressure from market competition, particularly in the context of frequent policy changes and deepening centralized procurement in the pharmaceutical industry [4]. - The main product, 米格列醇片 (奥恬苹®), performed well in 2024, winning bids in 25 provinces, but other products like 蒙脱石散 (贝易平®) and 多潘立酮片 (维动啉®) did not contribute effectively to revenue growth [4]. Termination of Collaborations - 易明医药 terminated its collaboration with 上海医药 for 瓜蒌皮注射液 (新通®) in December 2024, which was a significant revenue source, leading to uncertainty in future revenue streams [6]. - The company also suspended the market supply of 盐酸纳美芬注射液 (易美芬®), further impacting its market presence [6]. Future Outlook - To address the challenges posed by the termination of collaborations and declining revenue, 易明医药 needs to enhance its investment in product development and market promotion [6]. - The company has made efforts to improve profitability through optimized production and marketing strategies, but ongoing revenue decline and competitive pressures necessitate a stronger focus on core business capabilities [6].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [5][13]. Core Insights - The company reported a revenue of 8.017 billion RMB in 2024, a decrease of 17% year-on-year, and a net profit attributable to shareholders of 2.532 billion RMB, down 10% year-on-year [2]. - In Q1 2025, the company achieved a revenue of 1.525 billion RMB, reflecting a 37% decline year-on-year, with a net profit of 440 million RMB, down 48% year-on-year [2]. - The company's core products faced pressure due to high base effects and centralized procurement policies, particularly impacting key products like Pudilan and pediatric medications [3]. - The company has made progress in product introductions, securing four new product agreements, which are expected to support long-term growth [3]. - The company has a strong cash position with over 12.5 billion RMB in cash and financial assets, and it plans to distribute a cash dividend of 2.09 RMB per share, totaling approximately 1.922 billion RMB, which is 75.93% of the net profit for 2024 [4]. Financial Forecasts - Revenue forecasts for 2025 and 2026 have been revised down to 7.421 billion RMB and 8.139 billion RMB, respectively, with net profit estimates adjusted to 2.263 billion RMB and 2.557 billion RMB [5]. - The expected earnings per share (EPS) for 2025, 2026, and 2027 are projected to be 2.456 RMB, 2.774 RMB, and 3.126 RMB, respectively, with corresponding price-to-earnings (P/E) ratios of 10, 9, and 8 times [5].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [5][13]. Core Views - The company reported a revenue of 8.017 billion yuan in 2024, a decrease of 17% year-on-year, and a net profit attributable to shareholders of 2.532 billion yuan, down 10% year-on-year [2]. - The first quarter of 2025 showed a significant decline in performance, with revenue of 1.525 billion yuan, a 37% decrease year-on-year, and a net profit of 440 million yuan, down 48% year-on-year [2]. - The company is expected to see easing pressure from high revenue bases starting from Q2 2025, which may positively impact its core products [3]. Summary by Sections Performance Overview - In 2024, the company achieved a revenue of 8.017 billion yuan, a decline of 17% year-on-year, and a net profit of 2.532 billion yuan, down 10% year-on-year. The first quarter of 2025 saw revenue drop to 1.525 billion yuan, a 37% decrease year-on-year, with a net profit of 440 million yuan, down 48% year-on-year [2]. Operational Analysis - The company's core products faced pressure due to high revenue bases from the previous year and the impact of centralized procurement policies. Revenue from heat-clearing and detoxifying products was approximately 2.69 billion yuan, down 20% year-on-year, while pediatric products generated about 2.25 billion yuan, down 18% year-on-year [3]. - The company has successfully introduced four new products or partnerships in 2024, including a new drug in the respiratory field and a new pediatric drug in the ENT field [3]. Cash Flow and Dividends - As of Q1 2025, the company had over 12.5 billion yuan in cash and cash equivalents, indicating a strong cash position. The proposed cash dividend for 2024 is 2.09 yuan per share, totaling approximately 1.922 billion yuan, which represents 75.93% of the net profit attributable to shareholders for 2024 [4]. Profit Forecast and Valuation - The revenue forecasts for 2025 and 2026 have been revised down to 7.421 billion yuan and 8.139 billion yuan, respectively. The net profit forecasts for the same years have also been adjusted to 2.263 billion yuan and 2.557 billion yuan, respectively. The expected EPS for 2025-2027 is 2.46, 2.77, and 3.13 yuan, with corresponding PE ratios of 10, 9, and 8 times [5].