Core Viewpoint - The annual report of Kew Flower Pharmaceutical (葵花药业) for 2024 shows a stable performance with revenue of 3.377 billion yuan and a net profit of 492 million yuan, indicating a clear path for transformation in the traditional pharmaceutical industry amidst the restructuring of the Chinese medicine sector [1][11]. Group 1: Financial Performance - Kew Flower Pharmaceutical achieved an operating income of 3.377 billion yuan and a net profit attributable to shareholders of 492 million yuan in 2024 [1]. - The profit distribution plan approved by the board proposes a cash dividend of 5 yuan per 10 shares, based on a total share capital of 584 million shares as of December 31, 2024 [1]. Group 2: Industry Trends - The Chinese medicine industry is accelerating its transformation towards high-quality development, driven by policy changes such as the establishment of a standard management system for traditional Chinese medicine [3][11]. - The market demand is evolving, with increased consumer health awareness leading to a surge in chronic disease management and health maintenance needs, particularly in respiratory, cardiovascular, and wellness sectors [3][11]. Group 3: Company Strategy - Kew Flower Pharmaceutical is focusing on both internal growth through product innovation and external expansion, responding to the changing industry landscape [4]. - The company has a robust product portfolio with over 1,000 drug approval numbers, including more than 500 in the national medical insurance directory and nearly 300 in the essential drug list [5]. - Continuous product development is underway, including new formulations that cater to children's preferences and medication habits [6]. Group 4: Research and Development - The company is actively engaged in R&D with nearly 40 drug projects in development and collaborations with academic institutions to enhance innovation [7]. - A partnership with Peking University Medical School aims to establish a joint laboratory for innovative drug development, leveraging academic resources for mutual benefit [7]. Group 5: Digital Transformation - Kew Flower Pharmaceutical has completed a comprehensive digital transformation, setting a benchmark in OTC marketing and exploring new business models in digital marketing and e-commerce [8]. - Initiatives like the "Four Dragons Control Water" digital marketing project have successfully positioned certain products as market leaders, showcasing the company's ability to reach consumers effectively [8]. Group 6: Market Positioning - The company employs a "dual brand + full category" strategy, focusing on both pediatric and adult medications to create competitive barriers [9]. - Kew Flower Pharmaceutical is a leader in the pediatric medication sector, with over 60 listed products and several achieving significant sales milestones [9]. - In the adult medication market, the company targets chronic disease management, particularly in the areas of liver health and cardiovascular care, to capture new growth opportunities [10]. Group 7: Brand Value - Kew Flower Pharmaceutical has established strong brand equity with its two core brands, "Kew Flower" and "Little Kew Flower," valued at 18.432 billion yuan and 14.484 billion yuan respectively [10]. - The company's extensive product range and established brand trust contribute to its competitive advantage in a volatile market [10]. Group 8: Market Outlook - The overall market for traditional Chinese medicine is projected to reach approximately 1 trillion yuan by 2025, with significant growth potential in the Chinese patent medicine segment [11]. - Kew Flower Pharmaceutical is well-positioned to leverage its strategic focus on innovation and quality to capture a larger share of the expanding market [11].

Corporate Governance - The company held two shareholder meetings in 2024, reviewing 16 agenda items, all of which were approved [2] - The company continuously improved its governance system, optimizing 26 governance rules to ensure scientific decision-making and operational compliance [2] Information Disclosure and Investor Protection - The company strictly adhered to relevant regulations for information disclosure, ensuring timely and accurate reporting of significant operational information [3] - Various communication channels were established with investors, including a hotline, dedicated email, and investor interaction platforms [3] Strategic Planning for 2025 - The company aims to implement its "One Elderly, One Child, One Woman" strategy, focusing on traditional Chinese medicine, chemical and biological preparations, and health products [4][5] - The strategy emphasizes enhancing product offerings in the elderly care, chronic disease, and women's health sectors [4][5] Organizational Structure and Marketing Strategy - The company plans to optimize its marketing organization, aligning market and sales systems to enhance user engagement [7] - A user-centered approach will be adopted, focusing on efficient service delivery and brand recognition [7] Production and Quality Assurance - The company will implement the "Ten Steps to Quality Medicine" to ensure product quality and efficacy [8] - Emphasis will be placed on lean and flexible production methods to enhance efficiency while maintaining high standards [8] Research and Development Strategy - The company will continue its "Buy, Improve, Collaborate, Research, and Substitute" strategy to enhance its R&D pipeline [9] - Focus will be on advancing in-progress products and exploring external expansion opportunities in core areas [9] Digital Transformation - The company is committed to advancing its digital transformation, creating a user-centered digital marketing ecosystem [10] - Integration of information technology and AI will be prioritized to enhance operational efficiency and management quality [10] Financial Overview - As of December 31, 2024, the company reported total assets of 582,587.60 million, with liabilities of 123,587.68 million and equity of 458,999.92 million [13] - The total revenue for 2024 was 337,704.77 million, with a net profit of 50,273.15 million [13]