Investment Rating - The report maintains a rating of "Add" for the company [4] Core Views - The company achieved revenue and net profit growth in H1 2025, with revenue reaching 779 million yuan and net profit at 77 million yuan, representing year-on-year increases of 18.14% and 28.95% respectively [2] - Continuous improvement in internal controls and significant cash flow enhancement were noted, with operating cash flow net amounting to 246 million yuan, a year-on-year increase of 51.65% [2] - The company is focusing on "growth" as a primary objective across its business lines, emphasizing the enhancement of operational capabilities to support this growth [2] Financial Performance Summary - Revenue projections for 2025-2027 are 1.44 billion yuan, 1.67 billion yuan, and 1.94 billion yuan, with corresponding net profits of 136 million yuan, 156 million yuan, and 188 million yuan, indicating year-on-year growth rates of 82.6%, 14.8%, and 20.4% respectively [8] - The company reported a return on equity (ROE) of 6.2% in 2023, projected to rise to 9.7% by 2027 [9] - The earnings per share (EPS) is expected to increase from 0.18 yuan in 2023 to 0.38 yuan in 2027 [9] Business Segment Performance - Traditional Chinese medicine segment achieved revenue of 522 million yuan in H1 2025, a year-on-year increase of 14.66% [7] - The premium Chinese medicine segment reported revenue of 175 million yuan, up 9.66% year-on-year, with a total of 505 terminal stores as of H1 2025 [7] - The health wine segment saw significant growth, with revenue reaching 26 million yuan, a year-on-year increase of 57.18% [7] Research and Development - The company increased its R&D expenditure to 21 million yuan in H1 2025, a 15.5% increase year-on-year, and is collaborating with top research institutions to enhance clinical research and product development [3]