Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company is expected to maintain its leading position in the anesthesia and analgesia field, with steady growth from its core subsidiary, Yichang Renfu. The approval of new products and a rich R&D pipeline lay a solid foundation for long-term growth. The entry of China Merchants Group is anticipated to inject new momentum into the company's development, optimize governance, and bring about industrial synergies [1][12][11]. Financial Performance - In 2024, the company achieved operating revenue of 25.435 billion yuan, a year-on-year increase of 3.71%. The net profit attributable to shareholders was 1.33 billion yuan, a year-on-year decrease of 37.70%. The decline in profit was primarily due to increased sales, management, and financial expenses totaling 441 million yuan, credit impairment losses of 283 million yuan, and asset impairment losses of 394 million yuan, including a goodwill impairment of 202 million yuan related to Beijing Barui Medical [1][2]. - For Q1 2025, the company reported operating revenue of 6.137 billion yuan, a year-on-year decrease of 3.61%, but the net profit attributable to shareholders increased by 11.09% to 540 million yuan, indicating significant improvement in profitability [2]. Growth Potential - The growth of Yichang Renfu is driven by the launch of new products, with 2024 revenue reaching 8.702 billion yuan (up 7.97% year-on-year) and net profit of 2.703 billion yuan (up 11.30% year-on-year). Other subsidiaries also showed positive growth, with Epic Pharma achieving a revenue increase of 27.83% [3][4]. - The company plans to achieve operating revenue of over 27 billion yuan in 2025, with a gross profit margin exceeding 45%. The expansion of its pipeline in anesthesia products and the exploration of new application scenarios are expected to sustain revenue growth in the medium to long term [4][12]. Profitability and Debt Servicing Ability - In Q1 2025, the company's profitability showed recovery, with a sales gross margin of 48.56%, an increase of 2.16 percentage points year-on-year. The net profit margin after deducting non-recurring items was 8.65%, up 1.36 percentage points year-on-year. The asset-liability ratio continued to improve, reaching 43.32% at the end of 2024, down from 44.49% at the beginning of the year [5][10]. Shareholder Confidence - The restructuring of the controlling shareholder is progressing smoothly, with China Merchants Bio-Science increasing its stake, reflecting confidence in the company's future. The controlling shareholder is expected to hold 23.70% of the voting rights, which is anticipated to enhance governance and development momentum [11][12].

Core Viewpoint - The report highlights that Yuandong Biopharmaceutical has received approval for new products, which are expected to drive growth through internationalization and innovation, maintaining a "buy" rating for the company [1] Financial Performance - In 2024, the company achieved revenue of 1.35 billion yuan (+20.82% year-on-year), with a net profit attributable to shareholders of 238 million yuan (+5.15%) and a net profit excluding non-recurring items of 175 million yuan (+10.90%). After excluding stock incentive expenses, the net profit increased by 13.47% year-on-year, and the net profit excluding non-recurring items rose by 22.87% [1] - For Q1 2025, the company reported revenue of 306 million yuan (-2.97%) and a net profit attributable to shareholders of 61 million yuan (-19.22%), with a net profit excluding non-recurring items of 46 million yuan (-10.79%). The profit in Q1 2025 was under pressure due to stock incentive expenses [1] Business Segments Growth - The chemical preparations segment generated revenue of 1.077 billion yuan (+22.25%), the raw materials segment 121 million yuan (+28.65%), and the CMO/CDMO business 65 million yuan (+111.59%). However, technical services and transfers saw a decline in revenue of 63 million yuan (-42.81%) [2] - Domestic revenue reached 1.324 billion yuan (+20.04%), while overseas revenue was 25 million yuan (+84.66%). The growth in the chemical preparations segment was driven by both existing and newly approved products, with 13 high-end preparation products approved in 2024 [2] R&D and Innovation - The company invested approximately 290 million yuan in R&D in 2024, accounting for 21.31% of revenue, with 83 million yuan allocated to new drug development [3] - The company has a rich pipeline of products under development, including a diabetes drug that has reached Phase III clinical trials and several other innovative drugs that have received clinical trial approvals [3] Profit Forecast and Investment Rating - The profit forecast for 2025-2026 has been adjusted to 281 million yuan and 335 million yuan, respectively, with an expected profit of 401 million yuan in 2027. The corresponding PE ratios are 21, 18, and 15 times, indicating strong growth potential as new products are approved [3]