Core Viewpoint - The report from CICC maintains the net profit forecast for China National Pharmaceutical Group (01099) at RMB 7.475 billion and RMB 7.926 billion for 2025 and 2026 respectively, reflecting a year-on-year growth of 6.0% for both years [1] Group 1: Financial Performance - For the first half of 2025, the company reported operating revenue of RMB 286.043 billion, a decrease of 2.95% year-on-year, and a net profit attributable to shareholders of RMB 3.466 billion, down 6.43% year-on-year, resulting in earnings per share of RMB 1.11, which aligns with CICC's expectations [1] - The company's pharmaceutical distribution revenue for 1H25 was RMB 218.527 billion, a decline of 3.52% year-on-year, primarily due to the ongoing expansion of centralized procurement and national negotiations [2] - The medical device distribution revenue for 1H25 was RMB 57.053 billion, down 2.46% year-on-year, influenced by proactive business governance strategies and price reductions in centralized procurement products [2] Group 2: Profitability and Margins - The overall gross margin for the first half of 2025 was 7.11%, a decrease of 0.33 percentage points year-on-year, mainly due to a slight decline in the proportion of high-margin businesses [4] - The operating profit margin for the pharmaceutical retail business increased by 1.13 percentage points to 2.68% in 1H25, benefiting from revenue growth, network optimization strategies, and significant cost reductions [3] Group 3: Business Strategy and Outlook - The company aims to consolidate its leading position in the industry by advancing a differentiated regional business development strategy and accelerating business structure optimization [2] - The company is expected to achieve high-quality growth through the continuous deepening of its "dual-brand" strategy involving professional pharmacies and Guoda pharmacies [3]