Investment Rating - The report maintains a rating of "Add" for Jiangzhong Pharmaceutical [4] Core Views - The company demonstrates strong resilience in performance, with its health business stabilizing and recovering after restructuring [2] - Jiangzhong Pharmaceutical continues its tradition of high dividends, highlighting its long-term investment value [3] - The company is focused on expanding its product categories and enhancing channel strength, which is expected to drive revenue growth [3] Financial Summary - For 2023A, the company reported revenue of 4,553 million yuan, with a year-on-year growth rate of 17.2%. The projected revenue for 2025E is 4,287 million yuan, reflecting a decline of 3.4% [1] - The net profit attributable to the parent company for 2023A is 719 million yuan, with a year-on-year growth rate of 20.1%. The projected net profit for 2025E is 868 million yuan, indicating a growth of 10.2% [1] - The company plans to distribute a cash dividend of 0.50 yuan per share, which accounts for 60.78% of the net profit for the first half of 2025 [3] Strategic Positioning - Jiangzhong Pharmaceutical's strategy includes strengthening its OTC business, developing health consumer products, and expanding its prescription drug offerings [2] - The company aims to enhance its product matrix through brand integration and digital marketing, while also exploring high-quality resource integration and business development partnerships [2] - The company has a talent incentive mechanism in place, with over 50% of its research personnel benefiting from equity incentives, which is expected to stimulate innovation [2]

Core Viewpoint - In Q1 2025, the company reported a revenue of 1.184 billion yuan, a year-on-year decrease of 7.03%, while achieving a net profit attributable to shareholders of 285 million yuan, an increase of 5.91% [1] Group 1: Financial Performance - The company's Q1 2025 revenue breakdown includes 885 million yuan from the OTC segment (down 12.12% YoY), 187 million yuan from the prescription drug segment (up 23.68% YoY), and 111 million yuan from the health segment (up 0.59% YoY) [1] - The gross profit margin and net profit margin for Q1 2025 were 68.21% and 24.06%, respectively, reflecting increases of 1.20 percentage points and 2.94 percentage points YoY [1] Group 2: Cost Management - The company's expense ratios for sales, management, R&D, and financial costs in Q1 2025 were 33.80%, 4.51%, 2.28%, and -1.49%, showing changes of -1.79, +1.31, -0.07, and +0.20 percentage points YoY, respectively [2] Group 3: Future Outlook - The company is expected to achieve revenues of 4.9 billion yuan, 5.542 billion yuan, and 6.224 billion yuan from 2025 to 2027, with year-on-year growth rates of 10%, 13%, and 12% [2] - The projected net profits attributable to shareholders for the same period are 890 million yuan, 1.028 billion yuan, and 1.172 billion yuan, with growth rates of 13%, 16%, and 14% [2] - The company maintains a "buy" rating with projected PE valuations of 16, 14, and 12 times for 2025, 2026, and 2027, respectively [2]

Core Insights - Jiangzhong Pharmaceutical achieved a revenue of 4.435 billion yuan in 2024, a year-on-year decrease of 2.59%, while the net profit attributable to shareholders was 788 million yuan, an increase of 9.67% [1] - The OTC segment showed strong demand with a revenue of 3.266 billion yuan, reflecting a year-on-year growth of 7.07% [1] OTC Segment Performance - Key products in the gastrointestinal field, such as the core product "Gastrointestinal Digestive Tablets," saw a double-digit revenue growth, with sales reaching 169 million boxes, up by 10.91% year-on-year [1] - In the throat and cough segment, core products like "Compound Fresh Bamboo Liquid" and "Compound Grass Coral Tablets" contributed to double-digit growth, with sales of "Compound Grass Coral Tablets" reaching 37 million boxes, up by 4.05% year-on-year [1] - The nutritional supplement segment saw a revenue of over 200 million yuan, with sales of "Multivitamin Tablets" at 12 million boxes, down by 10.30% year-on-year [1] Health Business and Prescription Drug Segment - The health segment reported a revenue of 345 million yuan, a significant year-on-year decline of 47.30%, attributed to intensified industry competition and restructuring efforts [2] - The prescription drug segment generated a revenue of 793 million yuan, down by 3.50% year-on-year, with the decline narrowing due to the consolidation of traditional Chinese medicine pieces [2] Profitability and Cost Management - The company's gross margin was 63.52%, a decrease of 0.51 percentage points year-on-year, with the OTC segment having the highest gross margin at 72.74% [3] - The sales expense ratio improved to 33.70%, down by 2.33 percentage points year-on-year, while the net profit margin increased to 17.77%, up by 1.99 percentage points year-on-year [3] Dividend Policy and Future Outlook - The company announced a cash dividend of 7 yuan per 10 shares, resulting in a cash dividend ratio of 55.86%, with an overall annual dividend ratio reaching 95.77% [3] - The company aims for double-digit growth in revenue and profit by 2025, supported by a dual-driven strategy of "internal growth + external expansion" [3][4]

Core Viewpoint - The company reported a steady growth in revenue and net profit for 2024 despite industry pressures, with a revenue of 3.03 billion and a net profit of 1.96 billion, reflecting year-on-year increases of 5.4% and 5.3% respectively [2][3] Revenue and Profit Analysis - In Q4 2024, the company's revenue was 650 million, showing a year-on-year decline of 7.0%, while the net profit was 370 million, down 15.5% year-on-year [2] - The revenue from solution products and gel products for 2024 was 1.74 billion and 1.22 billion respectively, with year-on-year growth of 4.4% and 5.0% [3] Product Performance - The sales volume for solution products was 634.6 thousand units, up 23.4% year-on-year, while gel products saw a decline in sales volume to 89.4 thousand units, down 11.2% [3] - The average price of solution products decreased due to a shift in product mix, while the average price of gel products increased due to a higher proportion of high-margin products [3] Profitability Metrics - The company's gross margin for 2024 was 94.6%, a decrease of 0.5 percentage points year-on-year, while the net profit margin was 64.7%, down 0.1 percentage points [4] - In Q4 2024, the gross margin was 94.0%, down 0.4 percentage points year-on-year, and the net profit margin was 57.2%, down 5.7 percentage points [4] R&D and Cost Management - The company increased its R&D investment, with a R&D expense ratio significantly rising, completing 57 patent applications and engaging in 21 collaborative research projects with medical institutions [4] - The overall expense ratio increased by 1.3 percentage points to 22.2%, driven by higher R&D costs, while sales expenses remained stable [4] Product Line Expansion - The company received a Class III medical device registration for a new gel product, expected to launch this year, which will enhance its gel product line [5] - Clinical trial approvals were obtained for several new products, indicating ongoing innovation and product development [5] Strategic Acquisition - The company plans to acquire REGEN Biotech, Inc. in March 2025, which is expected to strengthen its competitive advantage in the global regenerative market and enhance its overseas market expansion capabilities [7]