Core Viewpoint - The financial misconduct of Guangji Pharmaceutical has been revealed, leading to significant losses and operational decline, raising concerns about the company's governance and future viability [1][4]. Financial Misconduct - Guangji Pharmaceutical's subsidiary, Jikang Pharmaceutical, used the total amount method to recognize revenue instead of the net amount method, resulting in inflated revenues [2]. - The inflated revenues for 2022 included: Q1 by 45.6 million (25.49%), Q2 by 137 million (26.68%), and Q3 by 138 million (20.49%) [2]. - The company faced a penalty of 1.5 million yuan, with the chairman and CFO receiving individual fines of 800,000 yuan each [2]. Operational Decline - The company reported a net loss of 295 million yuan in 2024, a decline of over 110% year-on-year, with cumulative losses of 435 million yuan over two years [1][3]. - Revenue for 2024 was only 639 million yuan, down 13.42%, with core product revenue dropping by 65.26% to 61.43 million yuan [3]. - Research and development expenses fell by 24% to 56.81 million yuan, constituting less than 9% of revenue [3]. Future Outlook - The company anticipates a reduced loss of 67 to 83.5 million yuan in the first half of 2025, attributed to cost-cutting and some recovery in product sales [4]. - However, challenges remain, including low capacity utilization and ongoing reductions in R&D investment, which threaten innovation and competitiveness [4][5].