Investment Rating - The report maintains an "Accumulate" rating for Jiangzhong Pharmaceutical [6][12] Core Insights - The company is expected to achieve growth through both "internal" and "external" drivers, despite short-term pressure on OTC products due to changes in terminal demand [2][12] - The health consumer goods segment has shown positive growth through proactive adjustments, while the core OTC segment has faced challenges [2][12] Financial Summary - Total revenue for 2023 is projected at 4,553 million, with a slight decrease to 4,435 million in 2024, followed by a recovery to 4,525 million in 2025, and further growth to 5,004 million in 2026 and 5,548 million in 2027 [4][13] - Net profit attributable to the parent company is expected to rise from 719 million in 2023 to 788 million in 2024, reaching 841 million in 2025, and continuing to grow to 1,062 million by 2027 [4][13] - The earnings per share (EPS) is forecasted to increase from 1.13 in 2023 to 1.32 in 2025, and further to 1.67 by 2027 [4][13] Segment Performance - The OTC segment reported revenue of 1,550 million, a decline of 10.14% year-on-year, primarily due to changes in terminal demand [12] - Prescription drugs achieved revenue of 360 million, reflecting a year-on-year growth of 7.44%, indicating that the pressure from centralized procurement has largely been alleviated [12] - The health consumer goods segment generated revenue of 228 million, marking a year-on-year increase of 17.35%, driven by a focus on self-developed products and key categories [12] Cost Management - The company's gross margin for the first half of 2025 was 66.60%, a decrease of 2.44 percentage points year-on-year, while the net profit margin improved by 1.99 percentage points to 26.13% [12] - Sales, management, R&D, and financial expense ratios were effectively controlled, with sales expense ratio decreasing by 6.20 percentage points [12] Future Outlook - The company plans to enhance its OTC business through new product development and product introduction, while focusing on core categories in health consumer goods [12] - Active exploration of mergers and acquisitions is underway to consolidate industry resources and strengthen core product advantages [12]

Core Viewpoint - Jiangzhong Pharmaceutical Co., Ltd. reported a decrease in revenue and a profit increase in its 2025 semi-annual report, highlighting strategic adjustments and business performance across its OTC, health consumer products, and prescription drug segments [1][8]. Financial Summary - Total assets increased to approximately 6.64 billion RMB, a 1.96% increase from the previous year [2]. - Operating revenue for the period was approximately 2.14 billion RMB, a decrease of 5.79% compared to the previous year [2]. - Total profit reached approximately 703.24 million RMB, reflecting a 12.01% increase year-on-year [2]. Business Segment Performance OTC Business - The OTC segment generated revenue of 1.55 billion RMB, a decline of 10.14% year-on-year, attributed to changes in terminal demand [8][9]. - The company focused on strengthening its brand presence and expanding product categories, particularly in gastrointestinal and throat health products [8]. Health Consumer Products - Revenue from health consumer products reached approximately 228 million RMB, marking a 17.35% increase year-on-year [9]. - The company emphasized self-research and development, enhancing its e-commerce capabilities and exploring new sales models [9]. Prescription Drug Business - The prescription drug segment achieved revenue of approximately 360 million RMB, a 7.44% increase year-on-year [10]. - The company adapted to industry policy changes and focused on academic marketing and compliance in both hospital and outpatient markets [10]. Strategic Initiatives - The company is committed to innovation and brand-driven growth, focusing on high-quality development and expanding its product matrix [11][13]. - Ongoing investments in R&D led to the authorization of 11 patents in traditional Chinese medicine [11][14]. - The company aims to enhance digital transformation across its operations, improving marketing and R&D efficiency [12][14]. Future Plans - The company plans to strengthen its core product categories and explore external mergers and acquisitions to enhance its market position [13][14]. - Emphasis will be placed on developing innovative products and optimizing production processes to improve efficiency and sustainability [14].

Core Insights - Jiangzhong Pharmaceutical achieved a revenue of 4.435 billion yuan in 2024, a year-on-year decrease of 2.59%, while the net profit attributable to shareholders was 788 million yuan, an increase of 9.67% [1] - The OTC segment showed strong demand with a revenue of 3.266 billion yuan, reflecting a year-on-year growth of 7.07% [1] OTC Segment Performance - Key products in the gastrointestinal field, such as the core product "Gastrointestinal Digestive Tablets," saw a double-digit revenue growth, with sales reaching 169 million boxes, up by 10.91% year-on-year [1] - In the throat and cough segment, core products like "Compound Fresh Bamboo Liquid" and "Compound Grass Coral Tablets" contributed to double-digit growth, with sales of "Compound Grass Coral Tablets" reaching 37 million boxes, up by 4.05% year-on-year [1] - The nutritional supplement segment saw a revenue of over 200 million yuan, with sales of "Multivitamin Tablets" at 12 million boxes, down by 10.30% year-on-year [1] Health Business and Prescription Drug Segment - The health segment reported a revenue of 345 million yuan, a significant year-on-year decline of 47.30%, attributed to intensified industry competition and restructuring efforts [2] - The prescription drug segment generated a revenue of 793 million yuan, down by 3.50% year-on-year, with the decline narrowing due to the consolidation of traditional Chinese medicine pieces [2] Profitability and Cost Management - The company's gross margin was 63.52%, a decrease of 0.51 percentage points year-on-year, with the OTC segment having the highest gross margin at 72.74% [3] - The sales expense ratio improved to 33.70%, down by 2.33 percentage points year-on-year, while the net profit margin increased to 17.77%, up by 1.99 percentage points year-on-year [3] Dividend Policy and Future Outlook - The company announced a cash dividend of 7 yuan per 10 shares, resulting in a cash dividend ratio of 55.86%, with an overall annual dividend ratio reaching 95.77% [3] - The company aims for double-digit growth in revenue and profit by 2025, supported by a dual-driven strategy of "internal growth + external expansion" [3][4]