Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company has established a multi-mode positive cycle research and development ecosystem, focusing on metabolic diseases and respiratory diseases, with two innovative drug projects already approved for market and several others in clinical trials [1] - The negative impacts on the company's main business have been largely digested, and it is expected to achieve steady growth in the future, with a projected net profit of 170-210 million yuan in the first half of 2025, representing a year-on-year growth of 94%-140% [2] - The company is expected to see a rebound in its main business, with innovative results gradually contributing to performance elasticity, projecting net profits of 351 million yuan, 435 million yuan, and 513 million yuan for 2025-2027, with corresponding growth rates of 217.4%, 23.8%, and 17.9% [2][3] Financial Summary - The company's revenue for 2023 is reported at 2,611 million yuan, with a year-on-year decline of 2.5%. It is expected to recover to 2,810 million yuan in 2025, reflecting a growth rate of 13.9% [3] - The net profit for 2023 is 263 million yuan, with a significant decline of 18.3%. However, it is projected to turn positive in 2025 with a net profit of 351 million yuan [3] - The earnings per share (EPS) is expected to improve from -0.35 yuan in 2024 to 0.41 yuan in 2025, indicating a recovery trend [3] Market Position and Product Development - The company’s core product, the brain thrombus capsule, is unique in the market, and the company is enhancing its product competitiveness through a combination of evidence-driven and market-driven cultivation models [2] - The innovative drug RAY1225 is progressing smoothly in clinical trials, showing significant potential for weight loss and improvement in metabolic indicators [7] - The company’s flu drug, Angladiwei, has a substantial market potential, with the global flu treatment market reaching 68.738 billion yuan in 2023, and it is expected to achieve rapid market penetration following its approval [7]

Core Viewpoint - Guangdong Zhongsheng Pharmaceutical Co., Ltd. reported a decline in revenue and a net loss for 2024, but showed signs of recovery in Q1 2025 with significant profit growth [1][2]. Group 1: Financial Performance - In 2024, the company achieved revenue of 2.467 billion yuan, a year-on-year decrease of 5.48% [1]. - The net profit attributable to shareholders was a loss of 299 million yuan, a shift from profit to loss compared to the previous year [1]. - The loss was primarily due to an asset impairment provision of 547 million yuan, with goodwill, development expenses, and intangible asset impairments accounting for over 90% [1]. - In Q1 2025, the company reported a net profit of 82.61 million yuan, a year-on-year increase of 61.96% [1]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was 78.43 million yuan, up 8.60% year-on-year [1]. Group 2: Strategic Adjustments - The company has developed a mid-term strategic plan focusing on "traditional Chinese medicine as the foundation, innovation as the lead, and concentrating on a specialized pharmaceutical health enterprise" [1]. - Zhongsheng Pharmaceutical actively responded to the policy background of drug procurement, successfully winning bids for its compound thrombus-dissolving series products in 2023 [2]. - The company is building a "volume-cost-fee" collaborative efficiency model around core products to counteract the impact of centralized procurement policies [2]. Group 3: Product Development - The commercialization of innovative drug products and the market expansion of existing chemical drugs are key growth drivers for the company [2]. - The company launched the first independently developed oral antiviral drug for COVID-19, known as Lai Ruitewei tablets (brand name: Le Rui Ling®) [2]. - Unique ophthalmic drugs such as sodium nitroprusside eye drops and pramoxine eye drops have established competitive barriers in the ophthalmology field [2].