Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company's brand operation business shows steady growth, with increased sales expenses impacting profitability [4][5] - In 2024, the company achieved a revenue of 8.09 billion yuan, a year-on-year decrease of 2.0%, while the adjusted revenue was 8.57 billion yuan [5] - The net profit attributable to shareholders for 2024 was 690 million yuan, down 2.9% year-on-year [5] - For Q1 2025, the company reported a revenue of 1.84 billion yuan, a slight decrease of 0.4% year-on-year, and a net profit of 90 million yuan, down 54.4% year-on-year [5] Business Segmentation Summary - **Brand Operation**: Revenue reached 5.56 billion yuan, up 9.2% year-on-year; adjusted revenue was 6.04 billion yuan [8] - Key products include: - Diquan: 2.1 billion yuan, up 10.7% - Hailu: 740 million yuan, up 14.9% - Baiyang Pharmaceutical: 950 million yuan, with core product revenue of 630 million yuan, up 16.6% [8] - **Wholesale Distribution**: Revenue decreased to 2.14 billion yuan, down 23% year-on-year as the company focuses on core brand operations [8] - **Retail Business**: Revenue remained stable at 370 million yuan, up 3.7% year-on-year [8] Financial Performance and Forecast - The gross margin for 2024 was 35.5%, an increase of 2.2 percentage points year-on-year, with brand operation gross margin at 48% [8] - Sales expenses increased, with sales expense ratios rising by 2.8 percentage points in 2024 and 4.3 percentage points in Q1 2025 [8] - Profit forecasts for 2025-2027 are as follows: - Net profit: 760 million yuan (2025), 901 million yuan (2026), 1.07 billion yuan (2027) - Growth rates: 10.0% (2025), 18.4% (2026), 19.2% (2027) [8] - The current price-to-earnings ratio (P/E) is projected to be 13X (2025), 11X (2026), and 9X (2027) [8] Market Position - The company is recognized as a leading pharmaceutical commercialization platform in China, demonstrating strong brand-building and multi-channel operational capabilities [8] - The company has successfully developed multiple products with revenues exceeding 100 million yuan and is accelerating its layout in innovative drugs and devices [8]