Core Viewpoint - The company held a performance briefing to provide insights into its 2024 annual report and Q1 2025 results, addressing investor concerns and outlining strategies for navigating industry challenges and opportunities [1][2]. Performance Briefing Overview - The performance briefing was conducted on June 30, 2025, with key executives present to engage with investors and respond to their inquiries [2]. Industry Trends and Company Strategy - The retail pharmacy industry is undergoing significant transformation, with a closure rate of approximately 5.7% in 2024, leading to an accelerated industry consolidation [2][3]. - The company aims to leverage this consolidation by enhancing compliance, improving service quality, and expanding its market share through franchise and alliance models [2][3]. Profitability and Cost Management - The company is focused on cost reduction and efficiency improvements, targeting over 100 million yuan in cost savings for 2025 through various initiatives [3][4]. - A comprehensive reform of the procurement system is underway to enhance supply chain efficiency and align product offerings with consumer needs [4]. Expansion Plans - The company plans to open 1,000 new stores in 2025, primarily through franchise models, while also converting existing stores to franchises [5]. - The strategy includes focusing on existing markets to increase market share and profitability [5]. Diversification Opportunities - The company is pursuing service diversification, including chronic disease management and community health services, to enhance customer engagement and loyalty [6]. - Product diversification efforts are focused on expanding non-pharmaceutical categories, with a reported 9% year-over-year increase in sales of general food and personal care products in Q1 2025 [6]. Market Positioning and Competitive Advantage - The company emphasizes its competitive advantages in offline retail, including immediate service, professional advice, and health management services, particularly in lower-tier cities [7][8]. - The company has established a robust compliance framework to navigate regulatory challenges and maintain its market position [12]. ESG Initiatives - The company has integrated ESG principles into its operations, achieving a rating upgrade from BBB to A in the WindESG assessment for 2024 [10][11]. Financial Returns and Shareholder Engagement - The company has committed to distributing at least 50% of its net profit as cash dividends from 2024 to 2026, reflecting a strong commitment to shareholder returns [13][17]. - Cumulative cash dividends since its IPO amount to 2.069 billion yuan, demonstrating a consistent return to investors [17]. Franchise and Alliance Business Development - As of Q1 2025, the company has established 5,408 franchise stores and over 21,000 alliance stores, with significant growth in alliance business sales [14].