Core Viewpoint - The recent financial report of Jianmin Group shows a decline in revenue and net profit for the first half of 2025, indicating challenges in the pharmaceutical market and increased operational costs [1][3]. Financial Performance - Total revenue for the first half of 2025 was 1.805 billion yuan, a decrease of 10.2% year-on-year [1]. - Net profit attributable to shareholders was 221 million yuan, down 7.83% year-on-year [1]. - In Q2 2025, total revenue was 913 million yuan, a decline of 12.21% year-on-year, with net profit of 110 million yuan, down 21.01% year-on-year [1]. - The gross margin improved to 59.44%, an increase of 38.26% year-on-year, while the net margin was 12.32%, up 2.73% year-on-year [1]. - The total of selling, administrative, and financial expenses reached 869 million yuan, accounting for 48.17% of total revenue, an increase of 34.66% year-on-year [1]. Key Financial Ratios - Earnings per share (EPS) decreased to 1.46 yuan, down 6.41% year-on-year [1]. - The company's net asset per share increased to 16.41 yuan, up 9.12% year-on-year [1]. - Operating cash flow per share remained stable at 0.36 yuan, with a slight increase of 0.84% year-on-year [1]. Changes in Financial Items - Accounts receivable decreased by 14.4% to 907 million yuan, while cash and cash equivalents fell by 8.36% to 171 million yuan [3]. - Short-term borrowings decreased significantly by 60.96% due to repayments by commercial subsidiaries [3]. - The company experienced a substantial increase in financial expenses, up 351.65%, attributed to changes in accounting for discounted bills [3]. Business Model and Strategy - The company relies heavily on marketing-driven performance, with a return on invested capital (ROIC) of 15.14% for the previous year, indicating strong capital returns [4]. - The company is focusing on optimizing its marketing assessment system and enhancing digital capabilities to improve sales performance [7]. Market Outlook - Analysts expect the company's performance in 2025 to reach 448 million yuan, with an average EPS forecast of 2.92 yuan [5]. - The company has seen a positive trend in sales of certain products, such as Longmu Bone Strengthening Granules and Jianpi Shengxue Granules, despite market challenges [7].

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company is expected to experience rapid growth in industrial revenue in the first half of 2025, with new pediatric drugs anticipated to gain market traction [5] - The company's revenue for the first half of 2025 was 1.805 billion yuan, a year-on-year decrease of 10.20%, while the net profit attributable to the parent company was 221 million yuan, down 7.83% [7] - The pharmaceutical industrial segment showed strong performance with a revenue increase of 23.07%, while the pharmaceutical commercial segment saw a decline of 37.82% due to restructuring efforts [7] - The company is focusing on a dual-brand strategy with "Longmu" for pediatric drugs and "Jianmin" for chronic disease and family medicine, which is expected to drive growth in the OTC product line [7] - The company is accelerating the commercialization of innovative traditional Chinese medicine, with significant new product launches and increased R&D investment [7] Summary by Sections Financial Performance - For 2023, the projected revenue is 4.213 billion yuan, with a year-on-year growth rate of 15.72%. However, a decline is expected in 2024 and 2025, with revenues of 3.505 billion yuan and 3.205 billion yuan respectively [6] - The net profit attributable to the parent company is forecasted to be 521 million yuan in 2023, with a significant drop in 2024 to 362 million yuan, followed by a recovery to 448 million yuan in 2025 [6] - The earnings per share (EPS) is expected to be 3.40 yuan in 2023, decreasing to 2.36 yuan in 2024, and then recovering to 2.92 yuan in 2025 [6] Business Strategy - The company is implementing a brand strategy that focuses on enhancing the market share and influence of its pediatric drug line and OTC products [7] - The innovative traditional Chinese medicine products are expected to gain traction, with new approvals and increased market coverage [7] Future Outlook - The company anticipates net profits of 448 million yuan in 2025, 514 million yuan in 2026, and 586 million yuan in 2027, with respective growth rates of 24%, 15%, and 14% [7] - The current stock price corresponds to a price-to-earnings (P/E) ratio of 14X for 2025, indicating a favorable valuation for potential investors [7]

Group 1: Report Overview - The report is about a research on Jianmin Group in the traditional Chinese medicine industry, with a research date of July 1, 2025 [1][2] Group 2: Research Basic Information - The research object is Jianmin Group, belonging to the traditional Chinese medicine industry, and the reception time was on July 1, 2025. The company's reception personnel included the company's director and president Wang Jun, board secretary Zhou Jie, securities affairs representative Cao Hong, and securities affairs assistant Wang Miao [17] Group 3: Detailed Research Institutions - The research institution is Liuhe Investment, a fund management company [20] Group 4: Main Content Product Sales - In 2025, the company optimized its marketing assessment system, advancing from "net sales assessment" to "net sales + profit". It overcame factors like consumption decline and reduced pharmacy foot - traffic in Q1 and achieved growth in pharmaceutical industry sales revenue. Longmu Zhuanggu Granules saw increased sales revenue and improved sales structure, while Biantong Capsules and Jianpi Shengxue Granules maintained good momentum. Hospital - line product sales were stable, and new product sales grew [22] Emerging Business - The company's traditional Chinese medicine diagnosis and treatment and big - health business are emerging. The traditional Chinese medicine diagnosis and treatment business developed healthily, with one new clinic opened in H1 and a total of four clinics in operation in Hanyang, Hankou, Wuchang, and Optics Valley. The big - health business focused on children's healthy growth, increasing core variety cultivation and differentiated product development [23] Innovative Traditional Chinese Medicine Sales - Since 2021, the company has successively obtained approvals for three innovative drugs. In 2025, it accelerated the commercialization of new products like Xiao'er Zibei Xuanfei Syrup and Qirui Weishu Capsules, with smooth market development. Xiao'er Niuhuang Tuire Plaster was newly approved, and its listing preparations are on schedule and will participate in this year's medical insurance negotiation. The company also increased R & D investment, advanced new drug projects, and optimized its product pipeline [24][25] Future Development Plan - The company will continue to focus on the core business of traditional Chinese patent medicine manufacturing, accelerate the incubation of emerging businesses, and achieve the "1 + N" strategic goal. Specific strategic measures are detailed in the company's "2024 Annual Report" and "June 2025 Investor Relations Activity Record" [26] Advertising and Marketing - As an OTC brand pharmaceutical company, it will strengthen brand power, create "Longmu" children's medicine brand and "Jianmin" chronic disease/family - essential medicine brand. It uses multiple advertising channels such as long - form videos, short - form videos, variety shows, CCTV, and elevator media, with advertising volume similar to last year [27] Marketing System Reform - In 2024, the company carried out a comprehensive marketing system reform. In 2025, it added profit contribution assessment on the basis of net sales assessment. It optimized the organizational structure, promoted digital construction, and reduced terminal inventory. As of the end of 2024, the channel inventory of Longmu Zhuanggu Granules on the OTC line and major products on the prescription line had basically returned to a reasonable level [28] Impact of Chinese Herbal Medicine Price - The overall decline in Chinese herbal medicine prices is beneficial for the company's cost reduction and profit improvement. The company's manufacturing center uses multiple procurement models and strengthens cooperation with upstream suppliers to ensure stable raw material supply [29][30]

Investment Rating - The industry investment rating is "Outperform the Market" [1][50]. Core Insights - Eli Lilly's first oral small molecule GLP-1 drug, Orforglipron, has successfully completed Phase 3 clinical trials, which is expected to change the landscape of weight loss medications [3][4]. - The ACHIEVE-1 trial showed that Orforglipron significantly reduced HbA1c levels by 1.3% to 1.6% from a baseline of 8.0% after 40 weeks, with over 65% of patients achieving HbA1c levels ≤6.5% [3][4]. - Patients receiving the highest dose of Orforglipron lost an average of 7.3 kg, indicating potential for further weight loss [4]. - Eli Lilly plans to submit a global application for Orforglipron for weight management by the end of this year and for type 2 diabetes treatment in 2026 [4][5]. Summary by Sections Industry Overview - The successful Phase 3 trial of Orforglipron positions it as a potential second oral GLP-1 drug in the U.S., following Novo Nordisk's Rybelsus [5]. Investment Strategy - Focus on "innovation," "overseas expansion," "equipment upgrades," and "consumer recovery" as key investment themes [7]. - Recommended companies include innovative drug developers and those with strong overseas market potential [7]. Key Companies to Watch - **Nocera Health**: Expected to achieve over 1 billion yuan in revenue from its core product, with a projected 49% year-on-year growth [8]. - **Sihuan Pharmaceutical**: Strong fundamentals with a stable growth outlook, particularly in the ADC market [11]. - **China Biopharmaceutical**: Rapid revenue growth with a focus on innovative products [13]. - **Aier Eye Hospital**: Benefiting from increasing demand in ophthalmology and ongoing overseas expansion [22]. Market Performance - The pharmaceutical sector saw a decline of 0.36% last week, while the broader market index rose by 0.59% [25][36].

Core Views - The report maintains a positive outlook on the biopharmaceutical industry, expecting it to outperform the market due to minimal impact from recent U.S. tariff policies on drug sectors [4][5] - The report emphasizes continued optimism for innovative drugs and sectors related to consumer recovery, highlighting the resilience of the pharmaceutical sector amidst tariff changes [4][5] Industry Insights - The recent U.S. tariff policy has a limited effect on the pharmaceutical sector, with most drugs, including various chemical drugs, vaccines, and biological products, exempt from tariffs. Raw materials like vitamins and amino acids are also on the exemption list [4][27] - The report suggests that the innovative drug sector has shown significant growth, providing a selection of quality stocks based on criteria such as strong fundamentals, potential in research pipelines, and favorable cash positions [4][5] Investment Strategy - The report recommends focusing on four main themes: "Innovation," "Going Global," "Equipment Upgrades," and "Consumer Recovery" [5] - **Innovation**: Invest in globally competitive innovative drugs and promising categories, with specific companies highlighted such as BeiGene and East China Pharmaceutical [5] - **Going Global**: Identify opportunities in overseas markets, with companies like Mindray Medical and Sinocare suggested for investment [5] - **Equipment Upgrades**: Expect support for medical equipment updates from government policies, with companies like Mindray Medical and United Imaging Healthcare recommended [5] - **Consumer Recovery**: Anticipate a rebound in sectors like ophthalmology and aesthetic medicine, with companies like Prue Eye Hospital and Tongce Medical highlighted [5] Key Companies to Watch - **Nocare Biopharma**: Expected to achieve revenue of 1.009 billion in 2024, with a 49% year-on-year growth in sales of its core product, Oubatinib [6] - **Sihuan Pharmaceutical**: Strong fundamentals with a stable performance, and a promising pipeline with multiple products expected to be approved between 2025 and 2027 [9] - **East China Pharmaceutical**: Anticipated growth driven by the commercialization of domestic nuclear medicine products and a robust R&D pipeline [10] - **China Biopharmaceutical**: Rapid revenue growth with an increasing proportion of innovative products, indicating potential for accelerated profit growth [11] - **Aier Eye Hospital**: Benefiting from growing demand in ophthalmology and favorable policies for private specialty hospitals, with significant expansion plans [21]

Investment Rating - The report suggests maintaining attention on the company, indicating a neutral investment rating for the next six months [7]. Core Insights - The company experienced a significant decline in revenue and net profit in 2024, with revenue at 35.0 billion yuan, down 16.8% year-on-year, and net profit at 3.6 billion yuan, down 30.5% year-on-year. This decline is attributed to the pain of reform and a decrease in core product sales [7]. - Despite the challenges, the company is focusing on marketing reforms and innovation in drug development, with 31 projects under research and development [7]. - The company’s investment income remained stable, with a notable contribution from its subsidiary, which achieved a net profit of 6.9 billion yuan, up 22.1% [7]. Financial Summary - Revenue projections for 2025-2027 are 37.78 billion yuan, 41.34 billion yuan, and 45.35 billion yuan, respectively, with expected growth rates of 7.8%, 9.4%, and 9.7% [2]. - The net profit forecast for the same period is 5.27 billion yuan, 6.59 billion yuan, and 8.16 billion yuan, with growth rates of 45.5%, 25.0%, and 23.9% [2]. - The company’s earnings per share (EPS) are projected to increase from 3.44 yuan in 2025 to 5.32 yuan in 2027 [2]. Business Segments - The pediatric segment, particularly the product Longmu Zhuanggu Granules, is expected to recover with a projected sales growth rate of 10% from 2025 to 2027 [8]. - The gynecology segment, including products like Xiaojin Capsules and Jianpi Shengxue Granules, is anticipated to see significant growth, with sales growth rates of 5% and 20%, respectively [8]. - The specialty Chinese medicine segment is projected to grow at 25% annually, driven by products like Jianmin Throat Tablets and Bian Tong Capsules [9].