Core Viewpoint - The announcement by Huaren Health highlights the introduction of a "dual directory" mechanism by the National Medical Insurance Administration, which aims to complement the basic medical insurance directory with a commercial health insurance innovative drug directory, creating a new payment channel for the pharmacy industry [1] Group 1: Company Initiatives - The company has established a dedicated commercial insurance business department to facilitate cooperation with insurance companies and third-party firms [1] - Huaren Health is actively engaging with insurance companies on the Huiminbao project and has signed direct payment agreements with multiple insurers to enable direct claims at pharmacy stores for drugs listed in the commercial insurance directory [1] - The company is designing "insurance + drugs + services" packages to provide more comprehensive health protection services for patients [1] Group 2: Industry Trends - The integration of "medical-pharmaceutical-insurance" ecosystems is identified as a future trend, emphasizing the importance of collaboration between these sectors [1] - The company is implementing data sharing with the commercial insurance system to optimize prescription verification, expedite claims processing, and share medication details, thereby enhancing user experience and promoting deeper integration of the "medical-pharmaceutical-insurance" ecosystem [1]

Group 1: Financial Performance - The company achieved a revenue of CNY 2.504 billion in the first half of 2025, representing a year-on-year growth of 15.52% [3] - The net profit attributable to shareholders reached CNY 104 million, a significant increase of 42.17% compared to the previous year [3] - The net profit excluding non-recurring gains and losses was CNY 101 million, reflecting a growth of 43.28% year-on-year [3] Group 2: Strategic Initiatives - The company implemented the "1234 strategy," focusing on one core area in pharmaceutical terminals and two directions: product matrix and pharmacy terminals [3] - The management emphasized high-quality development through multi-dimensional layout and systematic optimization, leading to continuous upgrades in industrial structure [3] - The company is shifting from traditional pharmaceutical retail to a comprehensive health service model, enhancing its competitive edge [3] Group 3: Market Challenges - The overall growth rate in the pharmaceutical retail industry has slowed down, with increased competition leading to a decrease in customer traffic and average transaction value [4] - Changes in healthcare policies and the rise of new retail channels have diverted customer traffic away from traditional pharmacies [4] - The number of pharmacies in the market has exceeded 700,000, intensifying competition and pressuring operational efficiency [4] Group 4: Future Outlook - The company plans to expand its store network, having opened 529 new stores in the reporting period, including 51 self-built and 478 acquired stores [8] - The management anticipates long-term growth opportunities driven by an aging population and increasing health demands, particularly in chronic disease management [9] - The company aims to enhance its service value and market position by focusing on product innovation and differentiated services [10] Group 5: Integration and Expansion Strategy - The management is adopting a cautious integration strategy, focusing on developing franchise operations and member business models [6] - The company is looking to make small-scale acquisitions to strengthen its market presence rather than pursuing large-scale expansions [6] - The establishment of a dedicated commercial insurance department aims to integrate health insurance with pharmacy services, enhancing customer experience [7]