Core Viewpoint - The article discusses the significant decline in the performance of Pian Zai Huang, a well-known Chinese medicine, highlighting the end of its decade-long growth story as it faces challenges in both revenue and profit due to changing consumer behavior and rising costs [4][5][6]. Group 1: Financial Performance - In the first three quarters of 2025, Pian Zai Huang reported revenue of 7.442 billion yuan, a year-on-year decrease of 11.93%, and a net profit of 2.129 billion yuan, down 20.74% [4][5]. - The third quarter alone saw revenue drop to 2.064 billion yuan, a decline of 26.28%, with net profit falling to 687 million yuan, down 28.82% [4][5]. - This marks the worst performance for the company in nearly a decade, breaking a trend of continuous growth from 2015 to 2024 [5][6]. Group 2: Core Business Challenges - The pharmaceutical manufacturing segment, which is crucial for the company, generated revenue of 4.016 billion yuan, accounting for 54.09% of total revenue, but experienced a year-on-year decline of 12.93% [6][7]. - The gross margin for the pharmaceutical manufacturing sector decreased by 7.51 percentage points to 59.38% [6][7]. - Other segments, including pharmaceutical distribution and cosmetics, also faced revenue declines of 8.45% and 23.82%, respectively, indicating widespread challenges across the company's main business areas [6][7]. Group 3: Market Dynamics and Consumer Behavior - The demand for Pian Zai Huang has weakened as consumers tighten their spending, particularly in non-essential categories, mirroring trends seen with other luxury products like Moutai [5][6]. - The company's core products, including the liver disease medication series, saw revenue drop by 9.41%, while the much-anticipated An Gong Niu Huang Wan experienced a staggering 65.20% decline in revenue [8][9]. - The stock price of Pian Zai Huang fell by 4.71% on the first trading day following the release of the disappointing quarterly report, reflecting a loss of market confidence [10]. Group 4: Cost Pressures - The rising costs of raw materials, particularly natural ingredients like cow bile and musk, have significantly impacted the company's profit margins, with cow bile prices soaring from approximately 350,000 yuan per kilogram in 2019 to around 1.7 million yuan per kilogram in 2025 [15][17]. - The company has historically relied on price increases to maintain profitability, having raised prices over 20 times since its listing in 2003, but this strategy is now showing signs of fatigue [15][17]. - Despite maintaining a retail price of 760 yuan per piece, the actual market price has fallen below 500 yuan, indicating a disconnect between pricing and consumer demand [17][18]. Group 5: Future Outlook - Pian Zai Huang is exploring new market channels, including traditional medicine, aesthetic medicine, and high-end elder care, in an attempt to revitalize demand [18]. - However, the effectiveness of these strategies remains uncertain as the company grapples with the challenges of a declining growth model based on scarcity and price increases [18].