Core Viewpoint - The financial performance of Te Yi Pharmaceutical (002728) shows significant growth in revenue and net profit for the first half of 2025, driven by high-margin traditional Chinese medicine products, despite an increase in operating expenses [1][2]. Financial Performance - Total revenue for the first half of 2025 reached 491 million yuan, a year-on-year increase of 56.54% [1]. - Net profit attributable to shareholders was 38.01 million yuan, up 1313.23% year-on-year [1]. - Gross margin improved to 60.23%, reflecting a 52.27% increase compared to the previous year [1]. - Net profit margin rose to 7.74%, a significant increase of 802.78% year-on-year [1]. - Operating expenses (selling, administrative, and financial expenses) totaled 227 million yuan, accounting for 46.27% of total revenue, which is a 39.42% increase year-on-year [1]. Cash Flow and Debt Management - Cash flow from operating activities showed a substantial increase of 442.65%, attributed to higher sales of high-margin products [2]. - The company reduced short-term borrowings by 39.93%, indicating effective debt management [2]. - Cash and cash equivalents decreased by 29.71% due to repayment of short-term loans [2]. Business Strategy and Market Potential - The company aims to sell 100 million boxes of its flagship product, the cough remedy, within the next 3-5 years, leveraging its historical efficacy and market demand [5]. - The cough remedy has a production capacity of 1.8 billion pieces, with potential to expand to 2.4 billion pieces based on market needs [5][6]. - The aging population in China, with 310 million people aged 60 and above, presents a growing market for respiratory health products [5]. Investment Interest - Several funds have recently increased their holdings in Te Yi Pharmaceutical, indicating growing investor interest [4]. - The largest fund holding is Wan Jia Yuan Zhen Heavy Chemical Stock A, with a scale of 246 million yuan and a recent net value increase of 1.72% [4].

Core Points - The company guarantees the authenticity, accuracy, and completeness of the quarterly report, with all board members assuming legal responsibility for any misstatements or omissions [2][3] - The first quarter report has not been audited, and the company has made retrospective adjustments to previous accounting data [3][4] Financial Data - The core product, cough relief tablets, achieved sales of 217 million pieces, with brand building investments reaching 106 million yuan [4] - The company is undergoing marketing organizational changes and brand marketing construction, which have shown initial results but may pose risks to short-term operating performance [4][5] Shareholder Information - The report includes details on the total number of common stock shareholders and the top ten shareholders, although there are no changes in the lending of shares for the top shareholders [4]