Core Viewpoint - Zhejiang Zuoli Pharmaceutical Co., Ltd. recently hosted an investor research event, providing an opportunity for investors to gain insights into the company's operations [1]. Group 1: Research Activity Details - The investor relations activity was a site visit held on September 12, 2025, from 10:00 to 11:00 and 15:30 to 17:00, at the company's conference room [2]. - Participating institutions included CITIC Securities, Hunan Huizhi Rongda, Zhiyuan Capital, among 16 others, with the company represented by Secretary of the Board, Ms. Wu Ying [2]. Group 2: Key Insights from the Research - The collection rhythm for Wuling capsules shows that there are still six provinces not included in the collection, with ongoing renewal work for traditional Chinese medicine collections in Guangdong and the Beijing-Tianjin-Hebei "3+N" alliance expected to be completed this year [3]. - The company is leveraging its collection status to enhance market expansion, focusing on hospitals and grassroots markets to increase market share and strengthen competitiveness [3]. - In the first half of 2025, sales revenue from traditional Chinese medicine formula granules grew by 56.60% year-on-year, leading to an increase in accounts receivable due to longer payment terms compared to general commercial companies [3]. - The company plans to improve accounts receivable management to enhance cash flow stability [3]. - Linglianhua granules, as a unique product in the Wuling series, transitioned to OTC sales last year, targeting health-conscious menopausal women through internet marketing and partnerships with major e-commerce platforms [3]. - The company is actively conducting clinical research to explore different indications and build academic evidence for this product [3]. - The company is seeking acquisition opportunities in advantageous fields such as neurology and psychiatry, focusing on targets that can create synergies with existing products and resources [3]. - After the expansion of the digital workshop for medicinal fungi fermentation, the total production capacity for Wuling mushroom powder will reach 900 tons per year, supporting approximately 2.5 billion yuan in output value [3]. - The digital workshop for solid pharmaceutical preparations is expected to be operational by the end of the year, meeting related demand [3]. - The high sales proportion in the East China region is attributed to the concentration of traditional Chinese medicine sales in Zhejiang Province, benefiting from early channel layout and deep penetration in the economically developed region [3]. - Sales in provinces such as Guangdong, Henan, Beijing, and Hebei are rapidly increasing as the company expands its market beyond Zhejiang and participates in collections [3].

Group 1: Sales and Market Expansion - The sales revenue of traditional Chinese medicine formula granules increased by 56.60% compared to the same period last year [2] - The company aims to strengthen market expansion and deepen coverage in hospitals and grassroots markets to enhance market share and competitiveness [1] - The company is focusing on the online marketing of Linglianhua granules, targeting health-conscious menopausal women [3] Group 2: Financial Management - The company's accounts receivable decreased compared to the first quarter of 2025, indicating stable management of accounts receivable [2] - The company plans to continue improving accounts receivable management to ensure healthy cash flow [2] Group 3: Production Capacity - After the expansion of the medicinal mushroom fermentation digital workshop, the total production capacity of Wuling mushroom powder will reach 900 tons per year, supporting approximately 2.5 billion yuan in output value [5] - The digital workshop for solid pharmaceutical preparations is expected to be operational by the end of the year, meeting the demand for capsule and tablet products [5] Group 4: Strategic Investments - The company is looking for acquisition targets that extend its core business, particularly in neurology and psychiatry, or those that can create synergies with existing products [4] - The focus is on unique or scarce products that can empower the company's development [4] Group 5: Regional Sales Performance - The high sales proportion in the East China region is attributed to the company's strong presence in Zhejiang province, where it is located, and the economic development of the region [6] - As the company expands sales of traditional Chinese medicine formula granules outside the province, the market share in other provinces is expected to increase [6]

Group 1: Strategic Direction - The company is focusing on the "一路向 C" strategy to enhance its presence in the consumer health market, particularly through the optimization of its OTC business and the development of innovative health products [2][3]. - The partnership with Zhejiang University aims to leverage AI technology for the deep development of medicinal fungi, enhancing the company's research capabilities and product innovation [10]. Group 2: Market Opportunities - External factors such as government support for traditional Chinese medicine and an aging population (22% of the population aged 60 and above by the end of 2024) are creating favorable conditions for the company's C-end market expansion [3]. - The company's C-end revenue currently accounts for just over 10%, indicating significant growth potential in the future [3]. Group 3: Operational Initiatives - In the first half of 2025, the company implemented several measures to boost C-end sales, including the development of large packaging products and strengthening partnerships with online platforms like Meituan and Ele.me [4][5]. - The establishment of the OTC division aims to enhance tactical layouts and execution capabilities, facilitating a smoother transition to consumer-oriented sales [5]. Group 4: Financial Performance - The net cash flow from operating activities for the first half of 2025 is projected to be between 27 million and 29 million, showing significant improvement compared to the first quarter [7]. - The company is confident in achieving a 30% net profit growth target for 2025, supported by its core business strategy and the "一路向 C" initiative [8]. Group 5: Competitive Advantage - The unique raw material, 乌灵菌粉, provides a competitive edge due to its differentiated efficacy in treating various health issues, making it difficult for competitors to replicate [6]. - The 乌灵 series products have been recommended in 82 clinical guidelines and textbooks, establishing a strong academic and brand influence that supports market expansion [3].