Core Viewpoint - Watson Bio is facing severe financial difficulties, with a 74.69% drop in net profit, yet it continues to distribute dividends exceeding its half-year profit, reflecting the harsh competition in the vaccine industry [1][4]. Financial Performance - In the first half of 2025, Watson Bio reported revenue of 1.154 billion yuan, a year-on-year decline of 19.47% [1]. - The net profit attributable to shareholders was 43.16 million yuan, down 74.69% year-on-year [1]. - The company announced a mid-term dividend of 0.30 yuan per 10 shares, totaling 47.98 million yuan, which exceeds its half-year net profit by 111.17% [1]. Declining Trends - Watson Bio's revenue has been on a downward trend, with declines of 19.12% in 2023 and 31.41% in 2024, while net profit fell by 42.44% and 66.10% respectively [2]. - The core product's batch release has halved, with only 7.6248 million doses released in the first half of 2025, a 44.91% drop from 13.8408 million doses in the same period last year [2]. - The company recorded a significant impairment charge of 76.2951 million yuan for its HPV vaccine-related intangible assets in the second quarter, impacting profitability [2]. Financial Health - As of June 30, accounts receivable reached 2.366 billion yuan, accounting for 16.91% of total assets and equivalent to 205% of half-year revenue [2]. - The company set aside 61.5483 million yuan for bad debt provisions in the second quarter, indicating pressure on its cash flow [2]. - Research and development expenses dropped to 161 million yuan, a 48.53% decrease year-on-year, reflecting a trend of declining investment in R&D since 2022 [2]. Industry Context - Watson Bio's struggles mirror the broader vaccine industry, with competitors like Wantai Bio and Zhifei Biological also reporting significant losses [3]. - The vaccine market is experiencing a supply-demand reversal, with a decline in demand for essential vaccines due to a decrease in newborn numbers and intense competition in the self-paid vaccine segment [3]. - The price of HPV vaccines has plummeted, with domestic two-valent vaccines dropping to 27.5 yuan per dose, a decline of over 90% from previous prices [3]. Strategic Implications - The unusual dividend distribution by Watson Bio may be an attempt to maintain market confidence, but it does not mask the company's declining ability to generate profits [4]. - The vaccine industry's "golden era" has ended, with leading companies facing collective losses and price collapses, driven by demographic changes and oversupply [4]. - The focus on survival and strategic transformation is becoming essential for all players in the industry as they navigate this challenging environment [4].