Summary of Tianjin Tasly Pharmaceutical Conference Call Company Overview - **Company**: Tianjin Tasly Pharmaceutical - **Industry**: Traditional Chinese Medicine, Biopharmaceuticals, Chemical Pharmaceuticals Key Points and Arguments Performance and Growth - Tianjin Tasly has effectively absorbed the impact of centralized procurement on its flagship product, Compound Danshen Dripping Pills, and expects steady growth moving forward [2][3] - The company is experiencing overall stable growth, with a strong focus on traditional Chinese medicine innovation and new indications for existing products [2][4] Product Focus and Revenue Contribution - The company is concentrating on cardiovascular, digestive metabolism, tumor immunity, and liver disease treatment areas, with cardiovascular products contributing significantly to revenue [2][8] - Compound Danshen Dripping Pills has surpassed sales of 2 billion, with the price drop effects being gradually absorbed [2][9] - The market potential for diabetic retinopathy (糖网) is substantial, with projected sales exceeding 2 billion [2][10] Strategic Partnerships - The acquisition by China Resources Sanjiu is expected to enhance Tianjin Tasly's performance in the outpatient market, leveraging Sanjiu's strengths in retail channels and brand development [2][5][6] Financial Outlook - The company is streamlining operations and focusing on core business areas, leading to improved profitability [2][7] - Projected net profit for 2025 is estimated at 1.15 billion, corresponding to a market valuation of 22 times [2][7][15] Product Pipeline and Innovation - The biopharmaceutical segment's core product, ProUK, has stabilized its decline, with expectations for steady growth in myocardial infarction indications and potential approval for cerebral infarction in 2025 [2][13][14] - The company is actively developing multiple innovative drug pipelines, including stem cell and CAR-T therapies, which are anticipated to contribute positively to future earnings [2][15] Risks and Challenges - The company faces industry policy risks, market competition risks, and research and development risks, which investors should monitor [2][16] Other Notable Products - Other products like Yangxue Qingnao and Qi Li Yi Qi are expected to grow steadily, with potential growth rates possibly exceeding that of Compound Danshen Dripping Pills due to their urgent demand and established market presence [2][12] Conclusion - Tianjin Tasly Pharmaceutical is positioned for stable growth with a strong product pipeline and strategic partnerships, despite facing certain industry risks. The focus on innovation and market expansion, particularly in the outpatient sector, presents significant opportunities for future profitability.

Core Viewpoint - Recently, the stock price of Lisheng Pharmaceutical has surged, with a market value increase of over 20% in just two months from early April to early June [1] Group 1: Company Developments - Lisheng Pharmaceutical received notification from Tianjin Tianshili Biopharmaceutical Group Co., Ltd. regarding the completion of the transfer of Tianshili Pharmaceutical Group shares to China Resources Sanjiu Medical & Pharmaceutical Co., Ltd. and Guoxin Investment Co., Ltd. [1] - The transfer of 28% of Tianshili shares to China Resources Sanjiu was completed in the first quarter of this year, which is expected to enhance the asset value of Lisheng Pharmaceutical [1] - The new management team initiated internal reforms after taking office in 2022, significantly improving operational vitality [2] Group 2: Financial Performance - The recent surge in Lisheng Pharmaceutical's stock is linked to a substantial increase in investment income, with a planned cash dividend of 304 million yuan for its subsidiary, Central Pharmaceutical [4] - The company’s net profit after deducting non-recurring items is projected to reach 430 million yuan this year, marking a historical high [7] - The cash on hand for Lisheng Pharmaceutical reached 2.118 billion yuan at the end of the first quarter, with a low debt level and an asset-liability ratio of only 16.39% [18] Group 3: Market Position and Valuation - The A-share pharmaceutical sector has seen a 7.57% increase since April, with Lisheng Pharmaceutical outperforming the industry with a 16.4% rise [2] - The company’s current price-to-book ratio is only 1.08, indicating potential for valuation improvement as investment income rises [8] - The stock's dividend yield has exceeded 4%, and if the dividend payout ratio remains at 48.61%, the total dividend this year could surpass 200 million yuan, setting a new record [16][18] Group 4: Strategic Initiatives - Lisheng Pharmaceutical has implemented a comprehensive reform strategy across five areas: mechanism, product, technology, marketing, and business model [13] - The company has established a dual-driven strategy of "industry + capital," focusing on both internal growth and external acquisitions [15] - A new round of stock incentive plans has been introduced, aiming to maintain high cash dividend levels while aligning with performance targets [16]

Core Viewpoint - The company held its 2024 annual performance briefing on May 16, 2025, to discuss financial status, market expansion, development strategy, and corporate governance with investors [1] Group 1: Company Performance - In 2024, the company achieved an operating income of 3.215 billion yuan and a net profit attributable to shareholders of 133 million yuan, representing a year-on-year growth of 14.01% [2] Group 2: Strategic Focus - The company will continue to adhere to an integrated development strategy for raw materials and formulations, focusing on high-quality development, steady progress, and operational efficiency [2][4] - The company aims to enhance its product pipeline, accelerate diversified and differentiated product development, and optimize its research-production-sales management model [2][5] Group 3: Market Expansion - The company is strengthening its presence in both domestic and international markets by optimizing marketing models and enhancing terminal development and academic promotion [4] - The overseas performance is driven by maintaining market share through key partnerships and flexible pricing strategies, as well as deepening engagement in emerging markets [2][4] Group 4: Management and Governance - The company emphasizes internal management improvements, focusing on energy conservation, efficiency enhancement, and lean management to drive cost reduction and efficiency [4] - The company is committed to protecting investor rights and has increased its cash dividend ratio to over 80% for both 2023 and 2024 profit distribution plans [2]

Investment Rating - The report maintains a "Positive" investment rating for the pharmaceutical industry [1] Core Insights - The pharmaceutical industry is experiencing continuous differentiation, with innovative drugs, raw materials, and CXO services performing well [3][4] - In 2024, 453 pharmaceutical companies achieved revenue of 2.46 trillion yuan, a year-on-year decline of 0.55%, and a net profit of 148.65 billion yuan, down 8.8% [3][71] - The first quarter of 2025 saw revenues of 601.7 billion yuan, a year-on-year decrease of 5.3%, and a net profit of 50.5 billion yuan, down 6.4% [3][71] Summary by Sections Innovative Drugs - In 2024, innovative drug companies generated revenue of 47.53 billion yuan, a year-on-year increase of 68.4, indicating strong momentum [3] - Domestic biotech companies are transitioning from R&D to commercialization, leading to significant revenue growth [3] Chemical Drugs - Chemical drug companies achieved revenue of 399.64 billion yuan in 2024, a year-on-year increase of 0.73%, with net profit rising by 13.25% [3] - The first quarter of 2025 saw revenues of 98.12 billion yuan, a year-on-year decline of 4.47% [3] Medical Devices - In 2024, the medical device sector generated revenue of 221.51 billion yuan, a year-on-year increase of 1.32%, but net profit fell by 13.22% [3] - The first quarter of 2025 reported revenues of 51.7 billion yuan, down 4.89% year-on-year [3] Biological Products - Blood products in 2024 generated revenue of 24.18 billion yuan, down 1.4%, while net profit increased by 14.47% [3] - Vaccine companies faced significant declines, with revenues dropping 45.3% in 2024 [3] Traditional Chinese Medicine - Traditional Chinese medicine saw revenues of 343.75 billion yuan in 2024, a decline of 4.1%, with net profit down 18.8% [3] Raw Materials - The raw materials sector achieved revenue of 122.58 billion yuan in 2024, a year-on-year increase of 7.9%, with net profit rising by 38.33% [3] Pharmaceutical Commerce - In 2024, pharmaceutical commerce companies generated revenue of 1.02531 trillion yuan, a year-on-year increase of 0.8%, but net profit fell by 13% [6] Medical Services - Medical service companies reported revenue of 77.66 billion yuan in 2024, down 2.0%, with net profit declining by 39.5% [6] CXO & Research Services - The CXO and research services sector generated revenue of 96.62 billion yuan in 2024, a year-on-year decrease of 3.92%, with net profit down 25.6% [6]

Core Viewpoint - The company reported a net profit loss of approximately 724.52 million yuan for the year 2024, with no cash dividends or stock bonuses proposed for shareholders [33][87]. Company Overview - The company specializes in the research, production, and sales of patented innovative traditional Chinese medicine, while also expanding into biopharmaceuticals and the health industry [4][5]. - The company has developed a unique research model for innovative traditional Chinese medicine, focusing on major diseases and leveraging its strong scientific research capabilities [5][6]. Business Segments Traditional Chinese Medicine - The company holds 17 patented traditional Chinese medicines, covering eight major clinical disease systems, with leading positions in cardiovascular and respiratory disease treatments [5][19]. - Key products include Tongxinluo capsules, which treat coronary heart disease and cerebral infarction, and have received multiple national science and technology awards [8]. Biopharmaceuticals - The company has established a comprehensive development strategy for biopharmaceuticals, including international registration and global sales [6]. - It has received approvals for 13 ANDA products in the U.S. market and has submitted registration applications in 53 countries [6][20]. Health Industry - The company is actively developing health products based on traditional Chinese health theories, integrating modern technology [7]. - It has launched a series of health products aimed at various health needs, including heart health and anti-aging [7]. Financial Performance - The company achieved a total revenue of approximately 6.51 billion yuan in 2024, with a significant net loss [33]. - The proposed profit distribution plan for 2024 includes no cash dividends or stock bonuses, reflecting the company's current financial situation [87]. Market Position - The company ranks 7th among traditional Chinese medicine companies in China and 30th in the broader pharmaceutical industry [17]. - Despite a declining trend in the market for traditional Chinese medicine for cardiovascular diseases, the company has maintained a growing market share in oral formulations [19]. Product Performance - The market share of key products such as Tongxinluo capsules has increased from 13.64% in 2015 to 17.69% in the first half of 2024 [19]. - The company’s diabetes medication, Jinlida granules, saw its market share rise from 4.42% in 2015 to 16.20% in the first half of 2024 [20].

Financial Performance - In 2024, the company's operating revenue was 2.441 billion CNY, a year-on-year decrease of 7.06% [1] - Net profit attributable to shareholders was 233 million CNY, an increase of 93.43% year-on-year [1] - The net profit after deducting non-recurring gains and losses was 183 million CNY, up 243.42% year-on-year [1] - Operating cash flow increased by 4.11% to 498 million CNY [1] - The weighted average return on equity rose to 12.89%, an increase of 5.63 percentage points year-on-year [1] Revenue Composition By Industry - Chemical drugs accounted for 2.254 billion CNY, 92.33% of total revenue [2] - Traditional Chinese medicine (mainly An Nao Wan/Pian) generated 182 million CNY, 7.46% [2] - Other industries contributed 502.38 thousand CNY, 0.21% [2] By Product - Vitamin drugs generated 1.125 billion CNY, 46.10% of total revenue [3] - Cardiovascular drugs brought in 670 million CNY, 27.43% [3] - Orthopedic drugs accounted for 272 million CNY, 11.13% [3] - Antitumor drugs generated 129 million CNY, 5.28% [3] - Electrolyte drugs contributed 124 million CNY, 5.09% [3] Future Outlook - The company is optimistic about future growth, with a focus on becoming an international pharmaceutical technology company with strong profitability and innovation capabilities [4] - Management efficiency is improving, with sales expense ratio below 30%, management expense ratio at 5.30%, and financial expense ratio down by 82% [4][7] - Key products expected to drive growth include An Nao Wan/Pian, which saw sales of 182 million CNY in 2024, a growth of over 80% year-on-year [5] - The injection of multiple vitamins (12) is projected to maintain a market share of over 80% and achieve sales exceeding 1.1 billion CNY in 2024 [6][14] Cost Management - The company has successfully reduced sales, management, and financial expenses, with a continued focus on optimizing costs [7] - The financial expense ratio has decreased significantly, indicating effective cost control measures [7] Product Development and Partnerships - The company plans to introduce differentiated products in the short term, focusing on oral products and exclusive traditional Chinese medicine [9] - Collaboration with Daiichi Sankyo has expanded, contributing approximately 240 million CNY, or 10% of total revenue [11] - The company has over 20 projects in the pipeline, primarily focused on generic drugs [12] Shareholder Engagement - In 2024, the company executed a share buyback plan, utilizing approximately 80 million CNY to repurchase over 30 million shares [12] - The asset-liability ratio has decreased to 30%, with limited potential for further reduction in the short term [13]